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Canada Mortgage Bonds (CMBs) are CMHC-guaranteed bonds issued by the Canada Housing Trust to fund pools of insured mortgages purchased from approved lenders, giving lenders a lower-cost source of funding that helps keep fixed mortgage rates competitive.
Approved lenders package insured mortgages into NHA MBS pools, then sell those pools to the Canada Housing Trust, which finances the purchase by issuing CMBs to investors. Because CMBs carry CMHC's guarantee, they trade at yields very close to Government of Canada bonds — making them a cheap, stable source of mortgage funding.
Fixed mortgage rates are typically priced as a spread over the matching-term government or CMB yield, so when 5-year CMB yields fall, lenders' funding costs fall too, creating room to lower 5-year fixed rates. Since 2024 the federal government has also been a direct buyer of CMBs — purchasing roughly $29 billion in 2024, another $29 billion in 2025, and a planned $30 billion in 2026 — a deliberate move to help hold down funding costs for fixed-rate mortgages.
Guaranteed by CMHC: Canada Mortgage Bonds carry a CMHC guarantee and are rated in line with Government of Canada debt, which keeps their yields low relative to other securitized products.
Built from NHA MBS pools: the underlying collateral behind a CMB is a pool of insured mortgages already packaged into NHA Mortgage-Backed Securities.
Drives 5-year fixed pricing: the 5-year CMB yield is one of the key benchmarks lenders reference when setting 5-year fixed mortgage rates.
Government has been an active buyer since 2024: as part of federal housing-affordability efforts, Ottawa has purchased a significant share of new CMB issuance since February 2024, aiming to keep CMB yields — and therefore fixed mortgage rates — lower than they would otherwise be.
Definitions reflect Canadian federal and provincial rules as of the “Updated” date above. Not advice for any specific file.
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