How an Energy-Efficient Home Can Lower Your Mortgage Insurance Cost

The CMHC Eco Plus refund (often called the Eco Plus rebate) is money that Canada Mortgage and Housing Corporation (CMHC) pays back to you when you buy a newly built, energy-efficient home with a CMHC-insured mortgage. The refund is 25% of your mortgage insurance premium, and it arrives after you close, not as a lower price on the day you buy.

If you are buying a new home with less than 20% down, mortgage insurance is probably part of your costs, and this program can return part of it. This guide explains who qualifies, how to claim, and shows a clearly labelled made-up example, plus five steps to take before you buy.

Quick answer: An energy-efficient new home can lower your mortgage insurance cost because CMHC Eco Plus refunds 25% of the insurance premium if the home meets an energy standard. The home must be newly built, your mortgage must be insured by CMHC, and you must apply within 2 years of closing. Sagen and Canada Guaranty offer similar 25% refunds on their own insured mortgages. Approval of your mortgage still depends on your income, credit, down payment, and the lender's rules, and a licensed mortgage broker can check which program may apply to your purchase.

Below, you'll find what the refund is, who qualifies, a worked example, how the three insurers compare, and five steps to claim it.

Key Takeaways

• CMHC Eco Plus gives a 25% partial refund of your mortgage insurance premium on a newly built, energy-efficient home.
• It is a refund paid after you close, not a discount at the closing table, so you still pay the full premium first.
• CMHC says your application must be submitted within 2 years of your mortgage closing date, and processing takes about 8 to 10 weeks.
• The home must meet an eligible energy standard or use at least 20% less energy than a typical new home under Natural Resources Canada's EnerGuide Rating System.
• In the made-up example below, a $12,000 premium becomes $9,000 after a $3,000 refund, but real premiums depend on your mortgage and down payment.
• Sagen and Canada Guaranty publish matching 25% programs, so ask your broker which insurer covers your mortgage before you choose a home.

What the CMHC Eco Plus Refund Is

The CMHC Eco Plus refund works by paying you back part of the mortgage insurance premium you already paid, once your new home proves it meets an energy-efficiency standard. Buyers across Ontario can use it when they buy a new home with an insured mortgage.

Definition moment: A premium (the fee you pay for mortgage insurance, which protects the lender if a borrower cannot repay) is usually added to your mortgage, so you pay it back with interest over time.

Definition moment: An insured mortgage (a mortgage covered by mortgage insurance, which is generally needed when your down payment is under 20% of the price) is the only kind this refund applies to, because there is no premium to refund if you have no insurance.

CMHC's Eco Plus page says you can apply for a 25% partial premium refund if you are CMHC insured and buying a newly built energy-efficient home. CMHC's 2022 announcement explains that Eco Plus improved an earlier green program that paid 15% to 25%, so all eligible buyers now get the higher amount, for homes bought or built on or after June 20, 2022.

Think of it as a thank-you for buying a home that uses less energy. It does not change your mortgage approval, and it does not lower your monthly payment on its own.

Bottom line: Eco Plus returns part of what you paid for mortgage insurance, after closing, if your new home meets the energy rules. For a refresher on how the insurance itself works, read our guide to CMHC mortgage insurance in Canada.

Who Qualifies for the Eco Plus Refund

Qualifying for Eco Plus means meeting four conditions at the same time: an insured mortgage, a newly built home, an energy standard, and a deadline. Here is what CMHC says about each one, and what to ask.

Definition moment: An EnerGuide rating (a score from Natural Resources Canada that shows how much energy a home uses in a year) is one way to prove a home is efficient. The Natural Resources Canada says a lower number means better energy performance, and the label compares your home with a benchmark home.

For condo buyers, CMHC says a unit must not have been occupied for residential purposes, with an exception for interim occupancy by the borrower before registration or possession. If you are buying before the building is finished, our guide to pre-construction condo mortgages in Toronto explains the steps.

Bottom line: The home, the mortgage, and the energy proof all have to line up, so ask about them before you sign, not after you close.

CMHC's page describes newly built homes only. Ask CMHC or your broker before you assume a resale home or a renovation qualifies.

A Worked Example With Made-Up Numbers

Example only: these are round, made-up numbers to show the method. They are not real premiums, and your own amount will be different.

The refund depends on the size of your premium, so a bigger premium returns a bigger refund. Here is how the same 25% works on three made-up premiums.

In every row you pay the full premium first, and the refund comes later. Plan your cash and your budget around the full amount, and treat the refund as a welcome extra.

Bottom line: Your real premium depends on your mortgage size and down payment, so use our purchase calculator and ask a broker for your actual figure.

Sagen and Canada Guaranty Offer Matching Refunds

The difference between the three programs is mostly which insurer covers your mortgage, because each one refunds only its own insured mortgages. CMHC is one of three mortgage insurers in Canada, alongside Sagen and Canada Guaranty.

Sagen's application form says its refund is for a newly constructed home built under a qualifying program, or one that uses 20% less energy than a typical new house under EnerGuide. The Sagen program sheet adds that supporting documents cannot be more than 5 years old.

Canada Guaranty says it refunds a qualified borrower who buys a newly constructed energy-efficient home, and it states that refunds are issued to the homeowner within 8 to 12 weeks of a complete application. Read the Canada Guaranty program sheet for its full terms.

Each insurer also requires that it receive all original premiums and fees before it issues a refund. Condo rules can differ by insurer, so ask which documents apply to your unit.

In many cases the lender arranges the mortgage insurance, so you may not choose the insurer yourself. Our comparison of CMHC, Sagen, and Canada Guaranty shows how the three differ.

Bottom line: All three insurers publish a 25% refund for energy-efficient new builds, so the key question is which one insures your mortgage and what proof it asks for.

5 Steps to Claim Your Refund

Claiming the refund works best as a checklist you start before you buy, because the proof comes from the builder. Here are five steps, in order.

1. Ask the builder about energy proof before you sign. Ask which energy program the home is built to, and ask for the certificate or EnerGuide label in writing once it is ready.
2. Confirm which insurer covers your mortgage. A licensed mortgage broker can tell you whether CMHC, Sagen, or Canada Guaranty applies, and what that insurer asks for.
3. Pay the premium as arranged at closing. The insurer must receive all premiums and fees before it issues a refund, so do not skip or delay any payment.
4. Collect your documents and note the deadline. Keep the certificate, your closing papers, and a calendar reminder for the 2-year deadline.
5. Submit the refund application and keep copies. CMHC says processing takes about 8 to 10 weeks, so follow up if you hear nothing.

CMHC's Eco Plus page has the current list of eligible energy certificates and the application, so check it before you apply.

What Toronto and GTA Buyers Should Know

Eco Plus matters most in Ontario's new-build market, where many buyers put down less than 20% and pay mortgage insurance. New homes and condos are being built across Toronto and the GTA, so there is plenty of choice.

Whether you are looking in Scarborough, North York, Richmond Hill, Pickering, or Ajax, ask each builder what energy proof comes with the home. Buyers in Ottawa follow the same CMHC rules with different builders.

If you are a first-time buyer, start with our first-time home buyer guide for Toronto, then see how closing costs in Ontario fit into your budget.

Bottom line: A new build can save energy and part of your insurance cost, but only if you ask for the proof early and plan for the refund to arrive later.

5 Mistakes to Avoid With Eco Plus

These mistakes are common, and each one can be avoided with a little planning.

1. Treating it as an upfront discount. The refund arrives after closing, so you still pay the full premium first. Budget for the whole amount.
2. Assuming every new home qualifies. The home needs an eligible certificate or proof of 20% less energy use. Ask the builder before you sign.
3. Missing the deadline. CMHC says you must apply within 2 years of closing. Set a reminder and keep your documents in one folder.
4. Assuming a resale home or renovation qualifies. CMHC's page describes newly built homes. Ask before you count on it.
5. Counting on the refund to qualify. Lenders decide approval on your income, credit, and down payment, and the refund comes later. Do not use it to cover closing costs.

Useful Resources for Ontario New-Home Buyers

If you are still saving, read our guide to down payment rules in Canada to see when mortgage insurance applies.

Ready to plan your purchase? Visit our mortgage pre-approval page, explore our first-time home buyer mortgage page, or talk to a licensed Ontario mortgage broker.

Frequently Asked Questions: CMHC Eco Plus Refund

What is the CMHC Eco Plus rebate?

The CMHC Eco Plus rebate, which CMHC calls a partial premium refund, returns 25% of your CMHC mortgage insurance premium when you buy a newly built, energy-efficient home. It is paid after you close, and you must apply to CMHC within 2 years of your closing date. It only applies to mortgages insured by CMHC, so ask a licensed broker which insurer covers yours before you buy.

How much can I save on mortgage insurance with an energy-efficient home?

You can get back 25% of your mortgage insurance premium, so the saving depends on how big your premium is. In a made-up example, a $12,000 premium returns a $3,000 refund and leaves $9,000. Your real premium depends on your mortgage size and down payment, and the refund is paid after closing, not at the closing table, so plan to pay the full premium first.

Does Eco Plus apply to resale homes or renovations?

CMHC's Eco Plus page describes the refund for newly built homes, including high-rise condo units and prefabricated homes, that have never been occupied. It does not describe resale homes or renovations, so do not assume they qualify. Ask CMHC or a licensed mortgage broker before you count on the refund, and check the current rules on the CMHC page, because programs can change over time.

What should I do if my mortgage is insured by Sagen or Canada Guaranty?

Ask that insurer about its own program, because CMHC only refunds CMHC-insured mortgages. Sagen and Canada Guaranty each publish a 25% premium refund for newly built energy-efficient homes, and both ask you to apply within 24 months of closing. Each also needs to receive all premiums and fees first. A licensed mortgage broker can tell you which insurer covers your mortgage and what documents it wants.

How long do I have to claim the refund?

CMHC says your application must be submitted within 2 years of your mortgage closing date, and that processing takes about 8 to 10 weeks. You will need proof the home meets an eligible energy standard, such as a certificate or an EnerGuide label from Natural Resources Canada. Keep your closing papers and certificate together, and set a calendar reminder so the deadline does not slip past you.

Should I use a mortgage broker when buying an energy-efficient new home?

A broker can check which insurer covers your mortgage, estimate your insurance cost, and tell you which refund program may apply before you commit to a home. lendsimpl is a licensed mortgage brokerage in Ontario (FSRA #13763), and its licensed professionals can review your down payment, the builder's energy proof, and the refund deadline together, so nothing is missed after you close.

Disclaimer

This article is for general educational purposes only and should not be taken as financial, legal, or mortgage advice. Mortgage options, rates, approvals, and lender requirements can vary based on borrower profile, property details, credit history, income, equity, documentation, and current market conditions. Speak with a licensed mortgage professional before making a mortgage decision. lendsimpl is a licensed mortgage brokerage in Ontario (FSRA #13763).