To obtain CMHC Mortgage Loan Insurance, lenders pay an insurance premium. Typically, your lender will pass these costs on to you. Your lender will give you the exact price when you apply for a mortgage.
The CMHC Mortgage Loan Insurance premium is calculated as a percentage of the loan and is based on the size of your down payment. The higher the percentage of the total house price/value that you borrow, the higher percentage you will pay in insurance premiums.
Remember: without mortgage insurance you may avoid the insurance premium but you’ll typically pay much higher interest rates and additional administrative fees. At the end of the day, for the vast majority of borrowers, the cost of CMHC Mortgage Loan Insurance is more than fully offset by the savings achieved.
A 10% premium refund may be available when CMHC Mortgage Loan Insurance is used to finance an Energy-Efficient Home.
|Premium on Total Loan||Premium on Increase to Loan Amount for Portability and Refinance|
|Up to and including 65%||0.60%||0.60%|
|Up to and including 75%||0.75%||2.60%|
|Up to and including 80%||1.25%||3.15%|
|Up to and including 85%||1.80%||4.00%*|
|Up to and including 90%||2.40%||4.90%*|
|Up to and including 95%||3.15%||4.90%*|
|90.01% to 95% —|
Non-Traditional Down Payment**
For portability and refinance, the premium is the lesser of Premium on Increase to Loan Amount or the Premium on Total Loan Amount. In the case of portability, a premium credit may be available under certain conditions.
* Premiums shown with an “*” do not apply for refinance. For portability the maximum LTV ratio is 90%, but CMHC may consider higher LTV ratios when the new ratio is equal to or less than the original LTV. For portability, the premium is higher for non-traditional down payments on Increase to Loan Amount.
** Down Payment Requirements — Traditional sources of down payment include: Applicant’s savings, RRSP withdrawal, funds borrowed against proven assets, sweat equity (<50% of min. required equity), land unencumbered, proceeds from sale of another property, non-repayable gift from immediate relative, equity grant (non-repayable grant from federal, provincial or municipal agency). Non-traditional sources of down payment include: Any source that is arm’s length to and not tied to the purchase or sale of the property, such as borrowed funds, gifts, 100% sweat equity, lender cash back incentives.
Premiums in Manitoba, Ontario and Quebec are subject to provincial sales tax. The provincial sales tax cannot be added to the loan amount.
Amortization Options — Portability and Refinance Transactions (when paying the Premium on Increase to Loan Amount)
- Maintain the remaining amortization period of the existing CMHC-insured loan.
- Where there is an increase to the loan amount, the amortization period of the existing CMHC-insured loan and the loan increase may be blended using a weighted average provided the resulting amortization does not exceed the remaining economic life of the property. For refinance transactions the resulting amortization may not exceed 25 years. A 0.60% blended amortization surcharge to the loan increase applies to the Premium on Increase to Loan Amount.
note: Effective June 1st, 2015, the mortgage loan insurance premium for homebuyers with less than a 10% down payment will increase by approximately 15%. (Source: CMHC.ca)