CMHC Insurance Calculator

CMHC mortgage default insurance is required when you purchase a home with less than 20% down payment. This insurance protects the lender (not you) in case you default on your mortgage payments.

The Canada Mortgage and Housing Corporation (CMHC) is the largest provider of mortgage default insurance in Canada. Genworth and Canada Guaranty also offer similar products. The premium is calculated as a percentage of your mortgage amount and can be added to your mortgage balance.

Key Facts About CMHC Insurance:

• Required for high-ratio mortgages: Any mortgage with less than 20% down payment must be insured.
• Maximum purchase price: CMHC insurance is available for homes up to $1,500,000.
• One-time premium: The premium is paid once and typically added to your mortgage balance.
• Provincial sales tax: Ontario charges 8% PST and Quebec charges 9% PST on the premium.
• Protects the lender: Despite paying the premium, the insurance protects the lender, not the borrower.

How to Avoid CMHC Insurance

The only way to avoid paying CMHC insurance is to make a down payment of 20% or more. While this requires a larger upfront investment, you'll save thousands on insurance premiums and have a lower mortgage balance.

For example, on a $500,000 home with 10% down, the CMHC premium would be $13,950 (plus PST in some provinces). With 20% down, you'd pay $0 in insurance premiums but need an additional $50,000 for your down payment.