BC CMHC Insurance: When You Need It and How It Works

BC CMHC Insurance Guide

CMHC mortgage insurance enables BC buyers to purchase homes with less than 20% down payment, which is often essential given high BC property values.

When CMHC Insurance Is Required

Mandatory With:

• Down payment less than 20%
• Purchase price up to $1 million
• Maximum 25-year amortization (insured)
• Owner-occupied properties only

CMHC Premium Rates

Current Premium Structure:

Example: $700,000 BC home with 10% down:

• Mortgage amount: $630,000
• CMHC premium: $19,530 (3.10%)
• Total mortgage: $649,530

BC-Specific Considerations

$1 Million Purchase Limit:
Many BC properties exceed $1M, which means:

• 20% down payment required
• No CMHC insurance available
• Larger savings needed

Strategy for Expensive Markets:

• Consider townhomes/condos under $1M
• Build equity before upgrading
• Use FHSA and RRSP programs

Benefits of Insured Mortgages

Despite premium cost, insured mortgages offer:

• Lower interest rates (often 0.10-0.20% less)
• Access with smaller down payment
• Standardized approval criteria
• Portability between lenders

Insurance Providers

Three approved insurers in Canada:

• CMHC (Canada Mortgage and Housing)
• Sagen (formerly Genworth)
• Canada Guaranty

Premiums are similar across providers.

Premium Payment Options

Standard Approach:

• Add premium to mortgage balance
• Pay over amortization period
• Included in mortgage payments

Alternative:

• Pay premium upfront (rare)
• Available PST in some provinces

Avoiding CMHC Insurance

Strategies:

• Save 20% down payment
• Use family gifts
• Access RRSP Home Buyers' Plan
• Consider FHSA
• Co-ownership arrangements

Conclusion

CMHC insurance makes homeownership accessible for BC buyers who can't save 20% down, but understanding the costs and limitations helps with planning.