CMHC insurance is required in Canada for home buyers with less than 20% down payment. The purpose of mortgage default insurance is to protect lenders in the event a home buyer defaults on the loan. As a result of this protection, lenders are able to offer lower mortgage rates on higher-risk mortgages and mortgages with lower down payments.
CMHC insurance regulation and premium rates in Ontario are the same across Canada. Insurance premium rates range from 1.80% to 4.00% of your mortgage amount. Federal regulations on CMHC insurance include the following:
• CMHC insurance must be purchased for all homes with less than 20% down payment.
• Homes purchased for more than $1 million are not eligible for CMHC insurance, therefore requiring homeowners to put more than 20% down.
• The maximum amortization period on CMHC insured mortgages is 25 years.
• Homes sold over $500,000 can no longer be purchased with a 5% down payment. The new minimum down payment is 5% of the first $500,000, and 10% of any amount over $500,000.
The CMHC insurance premium is added to your mortgage amount, and is paid off over your amortization period through monthly mortgage payments.
• CMHC insurance must be purchased for all homes with less than 20% down payment.
• Homes purchased for more than $1 million are not eligible for CMHC insurance, therefore requiring homeowners to put more than 20% down.
• The maximum amortization period on CMHC insured mortgages is 25 years.
• Homes sold over $500,000 can no longer be purchased with a 5% down payment. The new minimum down payment is 5% of the first $500,000, and 10% of any amount over $500,000.
The CMHC insurance premium is added to your mortgage amount, and is paid off over your amortization period through monthly mortgage payments.