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CMHC and CMHC Tips For Real Estate Buyers

CMHC and CMHC Tips For Real Estate Buyers

BC CMHC insurance

What is CMHC Insurance?
Canadian Mortgage and Housing Corporation (CMHC) mortgage insurance is typically required by lenders when homebuyers make a down payment of less than 20% of the purchase price. CMHC mortgage insurance helps protect lenders against mortgage default, and enables consumers to purchase homes with a minimum down payment starting at 5%* — with interest rates comparable to those offered with a larger down payment. To obtain CMHC mortgage insurance, lenders pay an insurance premium. Typically, your lender will pass this cost on to you. The premium is based on the loan-to-value ratio (mortgage loan amount divided by the purchase price). The premium can be paid in a single lump sum or it can be added to your mortgage and included in your monthly payments.

How much is CMHC?
The following table provides you with a general idea of the premiums charged by CMHC. The exact premium will be calculated when you apply for a mortgage and provincial sales tax may apply.

*The minimum down payment requirement for CMHC mortgage insurance depends on the purchase price of the home. For a purchase price of $500,000 or less, the minimum down payment is 5%.
When the purchase price is above $500,000, the minimum down payment is 5% for the first $500,000 and 10% for the remaining portion. CMHC mortgage loan insurance is available only for properties with a purchase price or as-improved/renovated value below $1,000,000.