Calculate Your CMHC Insurance Premium
8.3% of purchase price
What Is CMHC Mortgage Insurance?
In Canada, if your down payment is less than 20% of the purchase price, you must purchase mortgage default insurance. This insurance protects the lender (not you) in case you default on your mortgage.
Three companies provide mortgage default insurance in Canada:
- CMHC (Canada Mortgage and Housing Corporation) — A Crown corporation
- Sagen (formerly Genworth Canada)
- Canada Guaranty
All three use the same premium rate structure, so the cost is the same regardless of the insurer.
CMHC Insurance Premium Rates
| Down Payment % | Premium % of Mortgage | Example on $600K Mortgage |
|---|---|---|
| 5.00% – 9.99% | 4.00% | $24,000 |
| 10.00% – 14.99% | 3.10% | $18,600 |
| 15.00% – 19.99% | 2.80% | $16,800 |
| 20.00% or more | 0% (not required) | $0 |
Key Rules About CMHC Insurance
- Maximum purchase price: Insured mortgages are only available for homes priced under $1,000,000 (as of current rules)
- Minimum down payment: 5% for the first $500,000 and 10% for the portion above $500,000
- Premium is added to mortgage: The insurance premium is typically added to your mortgage balance (not paid upfront)
- PST applies in Ontario: Ontario charges 8% PST on the CMHC premium, which must be paid at closing (not added to mortgage)
- Maximum amortization: Insured mortgages have a maximum 25-year amortization
Minimum Down Payment in Canada
| Home Price | Minimum Down Payment |
|---|---|
| Up to $500,000 | 5% of purchase price |
| $500,001 – $999,999 | 5% of first $500K + 10% of remainder |
| $1,000,000+ | 20% minimum (no CMHC insurance available) |
Example: Minimum Down Payment on a $750,000 Home
5% of $500,000 = $25,000
10% of $250,000 = $25,000
Total minimum: $50,000 (6.67% of purchase price)
How to Avoid CMHC Insurance
The only way to avoid CMHC insurance is to make a down payment of 20% or more. While saving a larger down payment takes time, it can save you tens of thousands in insurance premiums.
Other strategies:
- Use the RRSP Home Buyers' Plan (up to $35,000 per person)
- Use the First Home Savings Account (FHSA)
- Gift from family members (documented with a gift letter)
- Consider a less expensive property in Mississauga's diverse market