Energy-Efficient Mortgage and CMHC Green Home Program | Broker Guide

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The Energy-Efficient Mortgage: Saving on Mortgage Insurance

In Canada, borrowers with a down payment below 20% of the purchase price must take out mortgage loan insurance from CMHC, Sagen, or Canada Guaranty. This premium, often added to the loan balance, represents a significant cost. However, all three Canadian mortgage insurers offer a partial refund of this premium when the property meets high energy-efficiency standards. This mechanism provides a tangible financial incentive for buyers who care about both the environment and their finances.

The CMHC Eco Program

The Canada Mortgage and Housing Corporation (CMHC) offers a refund of up to 25% of the mortgage insurance premium through its Eco program. To qualify, the property must meet one of the following criteria: achieve an EnerGuide rating of 82 or higher on the 0 to 100 scale, be ENERGY STAR certified for new homes, hold R-2000 certification, be built to Quebec's Novoclimat standards, or be LEED (Leadership in Energy and Environmental Design) certified.

EnerGuide Rating: A standardized assessment of a home's energy efficiency on a scale of 0 to 100, established by an energy advisor certified by Natural Resources Canada. A rating of 0 indicates a home with no energy efficiency, while 100 represents a net-zero energy home. The average for existing Canadian homes falls between 60 and 70.

Programs From Other Insurers

Sagen (formerly Genworth Canada) offers its Energy Program, which also provides a premium refund of up to 25%. Criteria are similar to CMHC's, requiring an EnerGuide rating of 82 or higher or a recognized certification. Canada Guaranty offers its Energy Advantage program with comparable conditions. The mortgage broker should verify each insurer's specific criteria, as they may vary slightly regarding accepted certifications and required documentation.

Qualification Process in Quebec

Initial EnerGuide Évaluation: Hire an NRCan-certified energy advisor to perform an energy évaluation of the property. The cost ranges from $300 to $600. The advisor conducts a blower door test and inspects insulation, windows, heating, and ventilation.
Verify the Rating Obtained: If the property scores 82 or above, it qualifies immediately. If the rating is lower, the homeowner can plan targeted energy-efficient renovations to reach the required threshold.
Submit the Application: The mortgage broker submits the EnerGuide report or recognized program certificate (Novoclimat, ENERGY STAR, R-2000, LEED) to the mortgage insurer with the loan application or refinancing request.
Premium Refund: Once the application is approved, the refund is applied directly to the mortgage balance, reducing the total amount borrowed and interest payable over the full amortization period.

Strategic Advantage for the Broker

Knowledge of the energy-efficient mortgage program is a competitive advantage for mortgage brokers. By proactively informing clients about this savings opportunity, the broker demonstrates deep expertise and offers tangible added value. This approach is particularly relevant in Quebec, where the Novoclimat program is well established and many new constructions are certified under it. The broker can also direct buyers of existing properties toward the Rénoclimat and Canada Greener Homes Grant programs to achieve the required EnerGuide rating of 82.

Frequently Asked Questions

What is the CMHC Eco Premium Refund?

The CMHC Eco program offers a partial refund of up to 25% of the mortgage insurance premium to borrowers whose property achieves an EnerGuide rating of 82 or higher, or is certified under a recognized program such as ENERGY STAR, R-2000, Novoclimat, or LEED. The refund is applied directly to the mortgage balance.

How do I get an EnerGuide rating for my property?

You need to hire an energy advisor certified by Natural Resources Canada to conduct an energy évaluation of the property. The évaluation includes an inspection of building components (insulation, windows, heating system, air sealing) and a blower door test. The result is a rating from 0 to 100, where 82 is the minimum threshold for the CMHC Eco program.

Do other mortgage insurers offer similar programs?

Yes. Sagen (formerly Genworth) offers its Energy Program with a refund of up to 25% of the premium, and Canada Guaranty has its Energy Advantage program with comparable criteria. Each insurer may have specific requirements regarding accepted certifications and the application process.

Does this program apply to renovations or only purchases?

The program applies to both situations. A buyer can qualify if the existing property already meets the required standards. A homeowner undertaking energy-efficient renovations can also qualify by demonstrating that the work achieves the minimum EnerGuide rating of 82 or an eligible certification, within the context of insured refinancing.

What is the mortgage broker's role in this process?

The broker informs the client about the program, helps them understand eligibility criteria, and coordinates with the mortgage insurer to submit the refund application. The broker can also recommend a certified energy advisor and help the client assess whether the investment in an EnerGuide évaluation (approximately $300 to $600) is worthwhile relative to the potential premium savings.