A "green mortgage" in Canada usually means one of two things: a partial refund of your mortgage loan insurance premium because the home is energy efficient, or a lender product that rewards efficient homes or efficiency upgrades with a rate discount, cash back or extra borrowing room. The best-known example is CMHC Eco Plus, which offers a 25% partial premium refund to buyers of qualifying newly built energy-efficient homes. None of these are huge on their own, but they can meaningfully offset the cost of a better-built home.
Key takeaways
- Mortgage loan insurance is required in Canada when your down payment is under 20%, and the premium is often added to your mortgage.
- CMHC Eco Plus offers a 25% partial refund of the insurance premium for eligible newly built energy-efficient homes; you apply within two years of closing.
- Other mortgage insurers and some lenders have offered their own energy-efficiency refunds or perks; terms differ, so ask directly.
- Some lenders let you borrow extra for planned improvements at purchase, which can fund efficiency upgrades at mortgage rates.
- This is general education, not financial advice; compare total costs with a qualified mortgage professional.
First, a quick refresher on mortgage insurance
If you buy a home with less than 20% down, your lender requires mortgage loan insurance, which protects the lender (not you) if you default. Canada has three main providers: CMHC, Sagen and Canada Guaranty. The premium is a percentage of the loan and is typically rolled into the mortgage, so you pay interest on it for years. That is why even a partial refund can be worth claiming.
CMHC Eco Plus: the premium refund for new efficient homes
CMHC Eco Plus provides a 25% partial refund of the CMHC mortgage loan insurance premium for buyers of eligible newly built energy-efficient homes, including houses, condo units and prefabricated homes that have never been occupied.
To qualify, according to CMHC, the home generally needs either:
- An eligible energy-efficiency certification (examples CMHC lists include ENERGY STAR for New Homes, R-2000, LEED, Passive House and BC Energy Step Code levels), or
- An NRCan EnerGuide energy rating showing it uses at least 20% less energy than a typical new home.
Key practical points:
- Apply within two years of your mortgage closing date.
- Processing typically takes several weeks.
- Ask your builder early for the certification or EnerGuide documentation you will need.
CMHC has also had a related option for insured homeowners who complete qualifying energy retrofits on an existing home. Criteria and availability change, so check CMHC's current eco product pages before planning around any refund.
What could it be worth?
Here is an illustrative example. Exact premiums depend on loan size and down payment.
| Item | Illustrative amount |
|---|---|
| Insured mortgage | $500,000 |
| Example premium at 4.00% | $20,000 |
| 25% partial refund | $5,000 |
On a large insured mortgage, that refund can cover a meaningful share of the cost difference between a code-built and a higher-efficiency new home.
Other insurer and lender options
Beyond CMHC:
- Private mortgage insurers (Sagen and Canada Guaranty) have offered their own premium refund programs for energy-efficient homes. Their criteria and refund levels have differed from CMHC's, so ask your broker which insurer covers your loan and what applies.
- Lender green mortgages. Some Canadian banks and credit unions advertise green or energy-efficient mortgage products, which may include a rate discount, cash back, or flexible terms for buying an efficient home or completing upgrades. Credit unions in particular have been active in this space.
- Purchase plus improvements. Many lenders let you add the cost of planned renovations to your purchase mortgage, with the funds released once the work is done. That can be a lower-cost way to pay for insulation, windows or a heat pump than a personal loan or credit card.
Read the fine print: a cash-back offer or discount is only worthwhile if the overall rate, fees and prepayment terms are competitive.
Financing upgrades on a home you already own
If you are not buying, options include:
- Refinancing or a home equity line of credit (HELOC). Often lower rates than unsecured loans, but you are borrowing against your home.
- Property-assessed financing. Several municipalities offer low-interest loans repaid through your property tax bill. See our post on PACE financing.
- Utility or provincial programs. Some offer on-bill financing or low-interest loans.
Federal loan support has also changed: the Canada Greener Homes Loan closed to new applications on October 1, 2025, after the Greener Homes Grant closed in 2024. Our financing page summarizes the general options, and our rebate finder shows current programs by address.
Making a green mortgage work for you
- Start with an energy evaluation. An EnerGuide evaluation by a registered energy advisor gives you a rating and an upgrade plan, and is often required for refunds and rebates.
- Ask builders about certifications. If you are buying new, ask whether the home will be labelled under a program your insurer recognizes.
- Keep every document. Labels, EnerGuide reports, invoices and closing documents.
- Calendar the deadline. Two years passes quickly after a move.
- Look at total cost of ownership. A more efficient home can mean lower monthly energy bills, which matters as much as the purchase price. Our guide to net-zero homes in Canada explains what high-performance new builds involve.
For the bigger picture of which upgrades deliver the most, see our home energy page.
Frequently asked questions
Can I get the CMHC Eco Plus refund on a resale home?
CMHC describes Eco Plus as a refund for newly built energy-efficient homes. If you are buying a resale home, ask CMHC or your broker about other eco products, and check private insurers' programs.
Do I need mortgage insurance to benefit from a green mortgage?
Not always. Premium refunds only apply to insured mortgages, but lender green mortgage perks and purchase-plus-improvements options may be available with a conventional mortgage.
Does an energy-efficient home get a lower interest rate automatically?
No. Some lenders offer discounts on qualifying homes, but you usually have to ask, and the offer should be compared against the best regular rate you can get.
The bottom line
Green mortgage incentives in Canada are modest but real. If you are buying a new home with an insured mortgage, an eligible efficiency certification can earn back a quarter of your CMHC premium, and lender perks or improvement financing can help pay for upgrades on any home. Ask early, keep your paperwork, and treat these savings as a bonus on top of a home that costs less to run.
Sundamentals is an independent, non-profit education platform. Program details and prices change often — check current programs for your address in our rebate finder.