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CMHC’s securitization programs support financial stability by providing lenders with reliable mortgage funding throughout the business cycle.
The annual limits on the amount of new guarantees are set by the Minister of Finance and are an important oversight mechanism to manage housing market risks and the Government’s exposure to the housing sector. These limits are separate and distinct from the $750 billion limit on securitization guarantee -in-force, which was increased by $150 billion in 2020 in support of the federal government’s response to financial market pressures related to the COVID-19 pandemic and will be in effect up to and including March 24, 2025. The limit on securitization guarantee-in-force will revert back to $600 billion effective March 25, 2025.
Annual Guarantee Limits
As authorized by the Minister of Finance, CMHC will provide up to $60 billion of new guarantees for CMB annually, including a $20 billion special purpose guarantee limit to increase the availability of funding for multi-unit mortgage loans insured by CMHC, and up to $170 billion of new guarantees of market NHA MBS annually, including $20 billion to support the special purpose guarantee in the CMB program, beginning January 1, 2024. These limits exclude NHA MBS issuance as reinvestment assets for CMB series issued before June 30, 2016. These limits will continue to be in effect until repealed, replaced, or amended under the authority of the Minister of Finance.
Canadian lenders continue to benefit from access to diverse and stable funding options, including deposits from customers, capital markets such as CMHC-sponsored securitization, the Canadian Covered Bond Program and other corporate debt.
Guarantee Fees
CMHC guarantees the timely payment of interest and principal for NHA MBS enabling approved financial institutions to pool eligible mortgages into marketable securities that can be sold to investors. CMHC charges issuers a fee to compensate for the guarantee it provides.
The current guarantee fees for NHA MBS are as follows and will continue to be in effect until repealed, replaced, or amended under the authority of the Minister of Finance:
| Term of NHA MBS | Affordability-linked Pools | Other NHA MBS Pools | |
|---|---|---|---|
| Fee Payable NHA MBS Guarantees <= $9B* | Fee Payable NHA MBS Guarantees > $9B* | ||
| 1 month to 6 months | 0.05% | 0.08% | 0.22% |
| 7 months to 1 year 6 months | 0.10% | 0.17% | 0.46% |
| 1 year 7 months to 2 years 6 months | 0.15% | 0.25% | 0.70% |
| 2 years 7 months to 3 years 6 months | 0.21% | 0.35% | 0.98% |
| 3 years 7 months to 4 years 6 months | 0.26% | 0.43% | 1.19% |
| 4 years 7 months to 5 years 6 months | 0.30% | 0.50% | 1.40% |
| 5 years 7 months to 6 years 6 months | 0.35% | 0.58% | 1.61% |
| 6 years 7 months to 7 years 6 months | 0.39% | 0.65% | 1.82% |
| 7 years 7 months to 8 years 6 months | 0.44% | 0.73% | 2.03% |
| 8 years 7 months to 9 years 6 months | 0.48% | 0.80% | 2.24% |
| 9 years 7 months to 10 years 6 months | 0.53% | 0.88% | 2.45% |
| 10 years 7 months to 11 years 6 months | 0.56% | 0.93% | 2.59% |
| 11 years 7 months to 12 years 6 months | 0.59% | 0.98% | 2.73% |
| 12 years 7 months to 13 years 6 months | 0.62% | 1.03% | 2.87% |
| 13 years 7 months to 14 years 6 months | 0.65% | 1.08% | 3.01% |
| Above 14 years 6 months | 0.68% | 1.13% | 3.15% |
Affordability-linked pools include social housing pools and multi-family pools with a minimum 20% of the issued amount represented by eligible multi-family loans insured under CMHC’s Mortgage Loan Insurance (MLI) Select product provided that the loan has a minimum of 50 affordability points awarded, or the MLI Affordable Flex product with the Interest Adjustment Date on or after January 1, 2020.
Affordability-linked pools will be excluded from an issuer’s annual NHA MBS guarantees when assessing against the annual guarantee threshold of $9 billion for higher tier pricing.
