How the Premium Reduction Works
The MLI Select premium reduction is applied as a percentage discount off the standard CMHC multi-unit mortgage loan insurance premium rate. It is not a reduction in your interest rate — it is a reduction in the upfront insurance premium that CMHC charges for insuring your multi-family mortgage. That reduced premium amount is typically added to (capitalized into) your mortgage balance, so the savings translate directly into a lower total loan balance and less interest paid over the amortization period.
- 50-point tier: 10% reduction off the applicable standard premium rate
- 70-point tier: 20% reduction off the applicable standard premium rate
- 100-point tier: 30% reduction off the applicable standard premium rate
Base CMHC Premium Rates for Multi-Unit Properties
CMHC’s standard multi-unit mortgage loan insurance premiums for 2025 are structured by loan-to-value (LTV) ratio. For MLI Select applications, the most common LTV ranges and their standard premium rates are:
| Loan-to-Value Ratio | Standard Premium Rate | After 10% Discount (50 pts) | After 20% Discount (70 pts) | After 30% Discount (100 pts) |
|---|---|---|---|---|
| Up to 65% | 0.60% | 0.54% | 0.48% | 0.42% |
| 65.01% – 75% | 1.70% | 1.53% | 1.36% | 1.19% |
| 75.01% – 80% | 2.45% | 2.21% | 1.96% | 1.72% |
| 80.01% – 85% | 2.90% | 2.61% | 2.32% | 2.03% |
| 85.01% – 90% | 3.15% | 2.84% | 2.52% | 2.21% |
| 90.01% – 95% | 4.00% | 3.60% | 3.20% | 2.80% |
Note: Premium rates are subject to CMHC updates. Confirm current rates with your approved MLI Select lender or contact our team at New Homes Alberta MLI Select.
Premium Savings by Tier: Real Dollar Examples
Scenario A: 10-Unit Acquisition, $3.2M Purchase Price, 85% LTV
Insured loan amount: $2,720,000 | Standard premium at 85% LTV: 2.90% = $78,880
- 50-point tier (10% discount): Premium = $71,008 | Savings = $7,872
- 70-point tier (20% discount): Premium = $63,136 | Savings = $15,744
- 100-point tier (30% discount): Premium = $55,264 | Savings = $23,616
Scenario B: 20-Unit New Construction, $6.5M Project Cost, 90% LTV
Insured loan amount: $5,850,000 | Standard premium at 90% LTV: 3.15% = $184,275
- 50-point tier (10% discount): Premium = $165,848 | Savings = $18,428
- 70-point tier (20% discount): Premium = $147,420 | Savings = $36,855
- 100-point tier (30% discount): Premium = $128,993 | Savings = $55,283
The Total Benefit Picture Beyond Premium Reduction
Premium reduction is important, but it is only one component of MLI Select’s financial advantage. The full benefit picture for Calgary investors includes:
- Extended amortization: Moving from a conventional 25-year to a 50-year MLI Select amortization significantly reduces annual debt service and improves DSCR
- Reduced down payment: At the 70 and 100-point tiers, down payment drops to 5%, releasing capital for additional acquisitions or development
- Limited recourse (100-point tier only): Property-only recourse protection has significant risk management value for large or leveraged portfolios
- Government-backed rates: CMHC-insured mortgages typically carry lower interest rates than conventional multi-family loans
Expert Take — New Homes Alberta: A common misconception we encounter is that the premium discount is the primary reason to pursue higher MLI Select tiers. In reality, for most Calgary investors, the 50-year amortization and the 5% down payment are the dominant financial benefits — the premium discount is meaningful but secondary. On a $5M new construction project, the amortization extension from 40 to 50 years alone can reduce annual debt service by $25,000–$35,000, which far exceeds the incremental premium saving of moving from the 50 to 70-point tier. Investors who focus exclusively on the premium discount are consistently underselling the program’s true value to their portfolio.
Frequently Asked Questions
Is the MLI Select premium discount applied upfront or over the life of the loan?
The discount is applied to the upfront mortgage insurance premium at closing. The discounted premium is typically capitalized into the mortgage balance, so the savings manifest as a lower total loan amount and less interest paid over the full amortization period. The compounding effect of a lower capitalized balance is substantial over 40–50 years.
Are MLI Select premium rates expected to change after 2026?
CMHC reviews its premium rate structure periodically. The tier discount percentages (10%, 20%, 30%) have been stable but can be updated with program revisions. For the most current rates applicable to your project, consult an approved CMHC lender or contact our team through the CMHC MLI Select Program page.
Does the premium discount apply to refinances, or only to initial acquisitions and construction?
The premium discount applies to new MLI Select applications, including acquisitions and new construction projects. For refinances of existing CMHC-insured properties, different rules may apply. Our Calgary MLI Select experts can advise on your specific refinance scenario. Call us at +1 403-305-9167.
