How Much Does Mortgage Protection Insurance Cost at Each Big Bank?
Last updated: February 2026
How Much Does Mortgage Protection Insurance Cost at Each Big Bank?
When you're getting a mortgage in Canada, your bank will almost certainly offer you mortgage protection insurance. But how much does it actually cost? And more importantly, are you getting good value for your money?
Let's cut through the sales pitch and look at the real numbers from Canada's five biggest banks.
Quick Answer: What You'll Pay at Each Bank
Here's what mortgage life insurance costs at Canada's major banks (rates per $1,000 of mortgage coverage):
| Bank | Coverage Limit | Rate Range (per $1,000) | Example: $400K at Age 35 |
|---|---|---|---|
| CIBC | Up to $750,000 | $0.08 - $1.62 | $52/month |
| BMO | Up to $750,000 | $0.09 - $0.99 | $52/month |
| RBC | Up to $750,000 | $0.10 - $1.63 | $56/month |
| Scotiabank | Up to $1,000,000 | $0.14 - $1.57 | $72/month |
| TD | Up to $1,000,000 | $0.13 - $1.66 | $68/month |
Rates based on non-smoker, single borrower. Your actual cost depends on your age and mortgage amount.
The bottom line? For a typical $400,000 mortgage and a 35-year-old borrower, you're looking at $50-75 per month, or $600-900 per year. Over a 25-year amortisation, that's $15,000-22,500 in premiums.
But here's the kicker: your coverage decreases as you pay down your mortgage, while your premiums stay the same.
How Bank Mortgage Insurance Pricing Actually Works
Unlike car insurance or home insurance, mortgage protection insurance isn't priced on risk assessment or claims history. The formula is surprisingly simple:
Monthly Premium = (Mortgage Amount / 1,000) x Rate x Number of Borrowers
Then add provincial sales tax.
What Determines Your Rate
Your rate per $1,000 of coverage depends on just a few factors:
- Your age when you apply - This is the biggest factor. Rates can jump 50-100% as you move through age brackets.
- Smoker status - Expect to pay roughly double if you smoke.
- Which bank you use - As you can see above, rates vary significantly between lenders.
- Coverage amount - Some banks offer discounts for mortgages over $300,000-$350,000.
What Doesn't Affect Your Rate
Interestingly, these factors that would matter for traditional life insurance don't affect bank mortgage insurance rates:
- Your health history (beyond basic qualifying questions)
- Your occupation
- Your hobbies or lifestyle
- Whether you're male or female
- Your family medical history
Why? Because bank mortgage insurance uses post-claim underwriting. They don't fully assess your insurability when you sign up. They wait until you die to investigate whether you should have been covered. This can lead to denied claims when your family needs the money most.
Detailed Breakdown: What You'll Pay at Each Bank
Let's look at the actual costs for different ages and mortgage amounts at each of Canada's big five banks.
TD Mortgage Protection
Coverage: Up to $1,000,000 Insurer: Canada Life Assurance Company
TD offers the highest coverage limit but also tends to be one of the more expensive options.
Sample Rates (Non-Smoker, Single Borrower)
| Age | $250,000 Mortgage | $400,000 Mortgage | $500,000 Mortgage |
|---|---|---|---|
| 30 | $33/month | $52/month | $65/month |
| 35 | $43/month | $68/month | $85/month |
| 40 | $60/month | $96/month | $120/month |
| 45 | $80/month | $128/month | $160/month |
| 50 | $115/month | $184/month | $230/month |
| 55 | $140/month | $224/month | $280/month |
Special features:
- 25% discount if multiple borrowers insure the same mortgage
- 25% discount for mortgages between $300K-$500K
- 35% discount for mortgages between $500K-$1M
- Optional critical illness coverage (up to $1M)
RBC HomeProtector Mortgage Insurance
Coverage: Up to $750,000 Insurer: Canada Life Assurance Company
RBC offers mid-range pricing with the option to lock in your rate at application.
Sample Rates (Non-Smoker, Single Borrower)
| Age | $250,000 Mortgage | $400,000 Mortgage | $500,000 Mortgage |
|---|---|---|---|
| 30 | $25/month | $40/month | $50/month |
| 35 | $35/month | $56/month | $70/month |
| 40 | $53/month | $84/month | $105/month |
| 45 | $75/month | $120/month | $150/month |
| 50 | $108/month | $172/month | $215/month |
| 55 | $143/month | $228/month | $285/month |
Special features:
- Rate locked in based on age and mortgage balance at application
- Won't increase with age if mortgage balance stays the same
- Optional critical illness coverage (up to $300K)
- Optional disability insurance (up to $3K/month)
Scotiabank Mortgage Protection
Coverage: Up to $1,000,000 Insurer: Canada Life Assurance Company
Scotiabank matches TD's high coverage limit with slightly lower rates in most age brackets.
Sample Rates (Non-Smoker, Single Borrower)
| Age | $250,000 Mortgage | $400,000 Mortgage | $500,000 Mortgage |
|---|---|---|---|
| 30 | $35/month | $56/month | $70/month |
| 35 | $45/month | $72/month | $90/month |
| 40 | $63/month | $100/month | $125/month |
| 45 | $90/month | $144/month | $180/month |
| 50 | $118/month | $188/month | $235/month |
| 55 | $145/month | $232/month | $290/month |
Special features:
- Discounts on premiums for mortgages over $350K
- Up to 20% discount if you have multiple coverages
- Optional disability coverage (up to $3,500/month)
- Optional job loss coverage (up to $3,500/month for 6 months)
BMO Mortgage Protection Insurance
Coverage: Up to $750,000 Insurer: Sun Life Assurance Company of Canada
BMO tends to offer some of the most competitive rates, especially for younger borrowers.
Sample Rates (Non-Smoker, Single Borrower)
| Age | $250,000 Mortgage | $400,000 Mortgage | $500,000 Mortgage |
|---|---|---|---|
| 30 | $23/month | $36/month | $45/month |
| 35 | $33/month | $52/month | $65/month |
| 40 | $50/month | $80/month | $100/month |
| 45 | $73/month | $116/month | $145/month |
| 50 | $103/month | $164/month | $205/month |
| 55 | $138/month | $220/month | $275/month |
Special features:
- Choose between 50% or 100% mortgage coverage
- Useful for co-borrowers who want to split coverage
- Optional critical illness coverage (up to $450K)
- Optional disability insurance (up to $3K/month)
- Optional job loss coverage (up to $3K/month for 6 months)
CIBC Life Insurance for Mortgages
Coverage: Up to $750,000 Insurer: Canada Life Assurance Company
CIBC typically offers the lowest rates for younger borrowers but costs increase significantly with age.
Sample Rates (Non-Smoker, Single Borrower)
| Age | $250,000 Mortgage | $400,000 Mortgage | $500,000 Mortgage |
|---|---|---|---|
| 30 | $20/month | $32/month | $40/month |
| 35 | $33/month | $52/month | $65/month |
| 40 | $50/month | $80/month | $100/month |
| 45 | $73/month | $116/month | $145/month |
| 50 | $108/month | $172/month | $215/month |
| 55 | $160/month | $256/month | $320/month |
Special features:
- 30-day review period with full refund if you cancel
- Premiums added directly to mortgage payments
- Can adjust payment frequency with your mortgage
The Hidden Cost: Declining Coverage, Fixed Premiums
Here's what the banks don't emphasise when they're selling you mortgage insurance: your coverage decreases every month, but your premiums don't.
How It Works
Let's say you buy a $400,000 home with $40,000 down. Your mortgage is $360,000, and you sign up for RBC mortgage insurance at $56/month (age 35, non-smoker).
Year 1: You're paying $672/year for $360,000 in coverage Year 10: You've paid down to $280,000, but you're still paying $672/year for just $280,000 in coverage Year 20: You owe $140,000, but you're still paying $672/year for just $140,000 in coverage
The Real Cost Per $1,000 of Coverage
Here's how your effective rate changes over time, even though your premium stays the same:
| Years Into Mortgage | Balance Remaining | Annual Premium | Actual Rate per $1,000 |
|---|---|---|---|
| 1 | $360,000 | $672 | $1.87 |
| 5 | $330,000 | $672 | $2.04 |
| 10 | $280,000 | $672 | $2.40 |
| 15 | $220,000 | $672 | $3.05 |
| 20 | $140,000 | $672 | $4.80 |
| 24 | $50,000 | $672 | $13.44 |
By year 20, you're paying nearly triple the rate for your coverage. By year 24, you're paying more than 7x what you started with.
Total paid over 25 years: $16,800 For coverage that started at $360K and ended at $0
Bank Insurance vs Term Life: The Real Cost Comparison
Now let's compare what you'd pay for the same protection with a traditional term life insurance policy.
Example: $400,000 Mortgage, 35-Year-Old Non-Smoker
Option 1: TD Mortgage Insurance
- Monthly premium: $68
- Coverage: $400,000 initially, decreasing to $0 over 25 years
- Beneficiary: TD Bank (pays off mortgage only)
- Total cost over 25 years: $20,400
- Average coverage over term: ~$200,000
Option 2: 25-Year Term Life Insurance
- Monthly premium: $35-45 (average from major insurers)
- Coverage: $400,000 for entire 25 years
- Beneficiary: Your family (can use for anything)
- Total cost over 25 years: $10,500-13,500
- Coverage stays at: $400,000
What the Difference Means
With term life insurance, you'd pay roughly half as much for coverage that:
- Stays level instead of decreasing
- Goes to your family instead of the bank
- Can be used for mortgage payments or any other expenses
- Remains portable if you switch lenders or refinance
When Bank Mortgage Insurance Might Make Sense
Bank mortgage insurance isn't always a bad deal. It can be the right choice if:
-
You have health issues that make it hard to qualify for traditional life insurance. Bank mortgage insurance has simplified underwriting with basic health questions.
-
You're older (55+) and term life rates are less competitive. The gap narrows for older borrowers.
-
You want absolute convenience and don't want to deal with a separate insurance application.
-
You only need temporary coverage while you build up savings or wait for group life insurance to start at a new job.
But for most healthy borrowers under 50, term life insurance offers better value and more flexibility.
Real Example: What a 35-Year-Old Actually Pays
Let's walk through a real-world scenario to see the total cost.
The Situation
- Borrower: Sarah, 35, non-smoker, healthy
- Mortgage: $400,000
- Amortisation: 25 years
- Goal: Protect her family so they can keep the house
Option 1: BMO Mortgage Insurance
- Monthly premium: $52 + tax (let's say 13% HST in Ontario) = $58.76/month
- Annual cost: $705.12
- 25-year total: $17,628
What Sarah gets:
- Coverage that starts at $400K and decreases to $0
- If she dies, BMO receives the payout and the mortgage is paid off
- If she switches lenders, she loses coverage and has to reapply
- If she refinances, she may lose coverage
Option 2: Term Life Insurance ($400K, 25-Year Term)
- Monthly premium: ~$40 (shopping around with major insurers)
- Annual cost: $480
- 25-year total: $12,000
What Sarah gets:
- Fixed $400,000 coverage for 25 years
- If she dies, her family receives $400,000 to use as they choose
- Can keep the same policy even if she switches mortgages or lenders
- Coverage stays in place if she refinances
- Family can use excess funds for other expenses (childcare, tuition, living costs)
The Verdict
Sarah saves $5,628 over 25 years with term life insurance while getting better, more flexible coverage.
If she pays off her mortgage early or switches lenders, she keeps her term life coverage. With bank mortgage insurance, she'd have to start over.
Use Our Calculator to See Your Actual Numbers
Everyone's situation is different. Your age, mortgage amount, health, and whether you smoke all affect what you'll pay.
Enter your details to see:
- What each bank would charge you for mortgage insurance
- What term life insurance would cost for the same coverage
- How much you'd save over the life of your mortgage
- Whether bank insurance or term life makes more sense for your situation
What to Do Next
If you're considering mortgage protection insurance:
1. Don't Decide at the Mortgage Appointment
Your mortgage specialist is on a deadline to close your file. That's not the time to make a 25-year insurance decision. You typically have 30 days to add coverage, and you can always apply later.
2. Get Term Life Quotes First
Even if you end up choosing bank mortgage insurance, get term life quotes so you know what you're comparing against. Use an insurance broker who can shop multiple companies for you.
3. Consider Your Total Insurance Needs
Your mortgage isn't your only financial obligation. Think about:
- Replacing your income for your family
- Covering childcare costs
- Paying for children's education
- Final expenses and estate costs
- Other debts (car loans, lines of credit)
A proper term life policy can cover all of these. Bank mortgage insurance only covers your mortgage.
4. Read the Fine Print
If you do choose bank mortgage insurance, make sure you understand:
- When coverage starts and ends
- What happens if you refinance or switch lenders
- What health conditions or circumstances might lead to a denied claim
- Whether you're covered for death by all causes or if there are exclusions
5. Review Your Coverage Regularly
Life changes. Your $400K mortgage today might be $200K in 10 years. Make sure you're not overpaying for coverage you no longer need, or underinsured for risks you've added.
Frequently Asked Questions
Is mortgage insurance from my bank mandatory?
No. Your bank can't require you to buy their mortgage insurance as a condition of approving your mortgage. This is illegal in Canada. However, they can (and will) offer it to you.
Don't confuse this with mortgage default insurance (CMHC insurance), which is mandatory if your down payment is less than 20%.
Can I cancel bank mortgage insurance?
Yes, you can cancel anytime. Most banks offer a 30-day money-back guarantee if you cancel within the first month.
What happens to my mortgage insurance if I switch lenders?
With bank mortgage insurance, your coverage typically ends when you switch lenders or refinance. You'd need to reapply with your new lender, and your rates would be based on your current age, which means higher premiums.
With term life insurance, your coverage continues regardless of what you do with your mortgage.
Do I need mortgage insurance if I already have life insurance?
Maybe not. If you have enough life insurance to cover your mortgage and other needs, extra mortgage insurance might be redundant. Review your total coverage to be sure.
What if I have health issues?
This is one area where bank mortgage insurance can be advantageous. The underwriting is simpler, and you might qualify even if you've been declined for traditional life insurance. Just be aware that they'll review your health history if you die and could deny the claim if you misrepresented your health.
Can both spouses get coverage?
Yes. Most banks allow up to two borrowers to be insured per mortgage. You'll pay separate premiums for each person, though some banks offer joint-borrower discounts.
Does my mortgage insurance premium change over time?
Your premium rate is typically locked in when you apply, based on your age at that time. However, if your mortgage balance increases (through refinancing or adding to the mortgage), your premium will increase proportionally.
The Bottom Line
Mortgage protection insurance from Canada's big banks costs between $20 and $160+ per month for a $400,000 mortgage, depending on your age. While convenient, it's typically more expensive than term life insurance and offers declining coverage with fixed premiums, meaning you pay the same amount for less protection each year.
For most healthy Canadians under 50, term life insurance provides better value:
- Roughly 40-50% lower premiums
- Level coverage instead of declining
- Flexibility to use the benefit for any purpose
- Portability if you switch lenders
Bank mortgage insurance makes sense if:
- You have health issues that make traditional life insurance hard to get
- You're older (55+) where term life premiums are less competitive
- You want maximum convenience and don't mind paying extra for it
Before you sign up for bank mortgage insurance, get quotes for term life coverage. You might be surprised how much you can save while getting better protection for your family.
Disclaimer: This article is for informational purposes only and does not constitute financial or insurance advice. Insurance rates quoted are approximate estimates based on publicly available information and may vary. Always consult with a licensed insurance advisor for personalized recommendations. SmartMortgageInsurance.com is not an insurance provider.