CMHC Mortgage Insurance Calculator 2023

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CMHC Insurance Premiums For Different Down Payments

Mortgage default insurance, also known as Canada Mortgage and Housing Corporation (CMHC) Insurance, protects your mortgage lender in the case of a default. It is different from regular home insurance in Canada because default insurance protects your lender, while home insurance protects you. Since insured mortgages are backed by the CMHC or a private mortgage insurer, your mortgage lender will be more willing to take on riskier borrowers. This makes it easier for you to be approved for a mortgage if you are getting CMHC insurance. In exchange, you will most likely have to pay for the cost of CMHC insurance, through CMHC insurance premiums.

CMHC insurance allows you to make a smaller down payment on your home. With CMHC insurance, you can make a down payment as low as 5%. Without CMHC insurance, you are required to make a down payment of at least 20%. CMHC-insured mortgages, or high-ratio mortgages, generally have lower mortgage rates when compared to uninsured mortgages. This means your mortgage interest savings can offset CMHC insurance fees.

The Canada Mortgage and Housing Corporation is owned by the Government of Canada, with the goal of making housing in Canada more affordable and accessible. To do so, the CMHC has a variety of federal government programs in place, such as providing financing and loans to build affordable apartments and rental units, to providing mortgage loan insurance for those looking to buy a home.

The CMHC also makes it easier for mortgage lenders to access money to lend out to Canadians through Canada Mortgage Bonds, which are CMHC-guaranteed bonds that are used to purchase National Housing Act (NHA) mortgage-backed securities (MBS) from lenders. In Canada, CMHC has the same role as FHA in the US.

Your CMHC insurance rate is calculated as a percentage of your purchase price. This percentage depends on your down payment amount, with the premium being smaller for larger down payments. The CMHC premium is a one-time charge on the amount of your insured mortgage.

For properties located in Ontario, Quebec, Manitoba or Saskatchewan, provincial sales tax is applied to your CMHC premium amount.

You may have to request for a CMHC-insured mortgage when applying for a mortgage from a lender. Your mortgage lender will obtain CMHC insurance and will pay for it on the closing date, with the lender passing the cost of the insurance premiums onto you.

You can choose to either pay the entire amount of your CMHC premium up-front, or pay it off gradually through your mortgage payments by adding the premium to your mortgage principal balance. Adding the cost of CMHC insurance to your mortgage balance will mean that your monthly mortgage payments will be higher. You can easily find out how much your monthly payments will be, including the cost of CMHC insurance, by using a monthly mortgage payment calculator.

If your property being insured is located in a province that charges provincial sales tax on the premium amount, you will have to pay this sales tax upfront. Sales tax cannot be added to your mortgage principal.

For example, making a 5% down payment on a $500,000 home in Ontario will result in a CMHC insurance premium of $19,000. Ontario HST on the premium will be $1,520, which will need to be paid immediately. The $19,000 premium can be added to your mortgage or paid in cash immediately as well.

CMHC insurance is required if your down payment is less than 20%. You won’t be able to get an uninsured mortgage from any major bank in Canada if your down payment is less than 20%. This requirement is put in place by the Office of the Superintendent of Financial Institutions (OSFI), an agency of the federal government that regulates financial institutions such as banks and federal credit unions.

If you make a down payment of at least 20% or more, you do not need CMHC insurance. However, your mortgage lender can still require you to get CMHC insurance even if you make a higher down payment in certain cases, such as if you’re purchasing in a remote location where it might be difficult to find a buyer.

• Your purchase price is $1,000,000 or above, or
• Your amortization period is longer than 25 years

In these cases, you must make a down payment of 20% or higher to get a mortgage.

Not all mortgage lenders can offer CMHC-insured mortgages. Only National Housing Act (NHA) approved lenders are able to offer mortgages with CMHC mortgage insurance. NHA approved lenders include federally regulated financial institutions, such as banks and federal credit unions. For this reason, private mortgage lenders do not offer insured mortgages.

While most credit unions in Canada are provincially regulated, many credit unions are NHA approved by being a member of their provincial credit union association. For example, Credit Union Central of Ontario represents 90% of credit unions in Ontario. Credit Union Central of Ontario is an NHA-approved lender, which allows their member credit unions, such as DUCA Credit Union, FirstOntario Credit Union, and Meridian to offer insured mortgages.

Some lenders are also restricted to offering insured mortgages to certain provinces. For example, ATB Financial can only offer insured mortgages in Alberta, while Alterna Savings is limited to Ontario. All of Canada’s major banks, as well as many B-lenders can offer insured mortgages across Canada.

CMHC insurance covers your insured mortgage loan amount. If you were to default on your mortgage, the CMHC will provide compensation to your mortgage lender to cover their losses. Even though the CMHC will make up for any shortfalls to the lender after your home is sold, you are still responsible for paying your mortgage. CMHC insurance does not protect you from a foreclosure or prevent you from defaulting on your mortgage.

Mortgage life insurance, also called mortgage protection insurance, helps cover your mortgage if you cannot make mortgage payments due to job loss, disability, critical illness, or death. You can get mortgage life insurance to cover your mortgage balance even if your mortgage is CMHC-insured. You can get separate mortgage life insurance from a private insurer or from your lender if they offer it. However, mortgage life insurance does not provide coverage for your property. You will need to get home insurance, which will be separate from mortgage life insurance. You can get home insurance quotes in just a few minutes online.

Since mortgage life insurance covers your mortgage principal balance, the amount of your eligible coverage will slowly decrease over time as you make your monthly mortgage payments, while your insurance premiums will stay the same.

Mortgage life insurance rates are based on a monthly cost for every $1,000 of coverage. For example, if the cost was $0.20 per $1,000 of coverage, a $500,000 mortgage that is covered 100% will have a monthly premium of $100.00.

When you apply for a CMHC-insured mortgage, your mortgage lender will submit your application to the CMHC for review. If you pass their underwriting policies and get CMHC approval, the CMHC will issue a Certificate of Insurance (COI).

Your CMHC Certificate of Insurance is valid for the entire amortization period of your insured mortgage. This is because CMHC insurance covers your mortgage balance until your mortgage is fully paid off, not just for the initial mortgage term.

Your CMHC Certificate of Insurance and certificate number is used whenever you renew your mortgage or switch lenders.

If you choose to change lenders when it’s time to renew your insured mortgage, you do not have to pay for CMHC insurance again. CMHC insurance covers your mortgage until it is paid off, and will follow you from lender to lender. Simply provide your CMHC certificate of insurance or certificate number.

CMHC mortgage insurance has specific eligibility requirements. For example:

• You can only have one CMHC-insured mortgage at a time (second properties cannot be CMHC-insured)
• One borrower or guarantor of the mortgage must have a minimum credit score of 600

To learn more about CMHC eligibility, such as allowed down payment sources and debt service, visit our CMHC Rules page.

The CMHC provides a variety of programs, from residential mortgage insurance to commercial mortgage insurance, along with different mortgage insurance loan types to help borrowers get approved for a mortgage. CMHC-insured commercial mortgages can have an amortization of up to 50 years with CMHC MLI Select if certain accessibility, affordability, or energy efficiency targets are met. Otherwise, CMHC commercial mortgages can have an amortization of up to 40 years.

A CMHC insurance premium is a one-time fee that is paid at closing, and is not an annual recurring fee that is charged every year, although the upfront fee can be rolled into your monthly mortgage payments. The premium charged does not depend on how long your mortgage amortization is. A CMHC-insured mortgage with an amortization period of 25 years will have the same CMHC fee charged as a CMHC mortgage with an amortization of 15 years.

If you make a mortgage prepayment that lowers your loan-to-value below 80% (equivalent to a down payment greater than 20%), your CMHC insurance is not cancelled, and you will not receive a refund. If you added the CMHC premium to your mortgage principal, the added amount is not removed. Similarly, if you fully pay off your mortgage early, you will not receive a refund for CMHC insurance premiums paid.

However, the CMHC does give premium refunds through the CMHC Green Home program. If you buy, build, or renovate your home up to certain standards, you can receive a CMHC premium refund of up to 25%. For example, having your home built to Energy Star standards will allow you to receive an insurance refund of 15%, while being built to the R-2000 Standard will allow you to receive a refund of 25%.

You can also get a credit for the CMHC premiums that you have previously paid if you obtain another CMHC-insured mortgage within a certain time period.

If you previously had a CMHC-insured mortgage, you can save on your CMHC insurance premiums for your next insured mortgage through CMHC portability.

The CMHC premium credit refund depends on how long ago your previous insured mortgage was made.

CMHC Portability Premium Credit

For example, you paid a CMHC premium of $20,000 on a home in Toronto. In 10 months, you move to Ottawa and get another CMHC-insured mortgage. The CMHC premium for your home in Ottawa is $15,000. You can get a premium credit of 50% for the home that you sold in Toronto, which will result in a premium credit of $10,000. This is applied against your new CMHC mortgage in Ottawa, meaning that you will only have to pay a $5,000 CMHC insurance premium.

If your new CMHC-insured mortgage has the same or lower mortgage balance, amortization, and loan-to-value ratio, your CMHC insurance can be ported over from your old mortgage to your new mortgage. Since you will be keeping your old CMHC insurance for your new home, you won’t have to apply for CMHC insurance again, and you won’t have to pay any additional CMHC premiums.

If you increase your insured mortgage loan amount or loan-to-value ratio, you will have to pay CMHC premiums on the difference between your old mortgage balance and your new mortgage balance. The CMHC insurance rate that applies to this difference is higher than regular CMHC premium rates.

CMHC Premium on Increased Loan Amounts

For example, you make a down payment of 10% for a $400,000 home, so your insured mortgage is for $360,000. You want to borrow more money, so you refinance your mortgage to increase your mortgage balance to $380,000, equivalent to a 5% down payment.

The increased loan amount is $20,000. The CMHC premium that you will have to pay is the lower of the CMHC premium on the whole mortgage amount or the CMHC portability premium on the increased amount. In this case, the CMHC premium on the whole amount is $15,200 (4% of $380,000) while the premium on the increased amount is $1,260 (6.30% of $20,000). The CMHC premium that you will pay for increasing your loan amount is $1,260.

When calculating the CMHC premium on the whole amount, you can apply any CMHC portability premium credits that you might be eligible for. For example, if you increase your loan amount within 12 months, you can get a 50% credit from your old mortgage.

Your old mortgage had a CMHC premium of $11,160 (3.10% of $360,000. The credit that you can apply for is $5,580 (50% of $11,160). Since $5,580 for the whole amount is still greater than the $1,260 on the increased amount, you will still only pay $1,260.

You can get CMHC insurance even if your down payment is greater than 20%, which could happen if your lender requires you to do so in order to qualify for a mortgage with them. You will still need to pay for CMHC insurance, but the premium rate is lower compared to high-ratio mortgages.

CMHC Fees for Down Payments Greater Than 20%

Other CMHC fees may apply for certain scenarios, such as if you make a down payment using non-traditional sources, or if you extend your commercial mortgage amortization over more than 25 years.

CMHC Fee for Non-Traditional Down Payment Sources

CMHC Commercial Mortgage Amortization Premium Surcharge

4 Provinces And Their Provincial Sales Tax Rates

ManitobaRST: 7%

OntarioPST: 8%

QuébecQST: 9.975%

SaskatchewanPST: 6%