Mortgage loan insurance is typically required by lenders when homebuyers make a down payment of less than 20% of the purchase price. Mortgage loan insurance helps protects lenders against mortgage default, and enables consumers to purchase homes with as little as 5% down payment — with interest rates comparable to those with a 20% down payment.
To obtain mortgage loan insurance. Typically, your lender will pass this cost on to you. The premium payable is based on a percentage of the home’s purchase price that is financed by a mortgage. The premium can be paid in a single lump sum or it can be added to your mortgage and included in your monthly payments.
Mortgage loan default insurance is not to be confused with mortgage life insurance which protects the family. Mortgage Loan Insurance protects the lender only if the lender does not recover the loan in case the borrower defaults on the mortgage.
How Much Does Mortgage Loan Insurance Cost?
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.
Premium Charge onLoan-to-Value |
Premium on Total Loan |
Premium on Increase to Loan Amount for Portability and Refinance |
||
Standard Premium |
Self-Employed without 3rd Party Income Validation |
Standard Premium |
Self-Employed without 3rd Party Income Validation** |
|
Up to and including 65% |
0.50% |
0.80% |
0.50% |
1.50% |
Up to and including 75% |
0.65% |
1.00% |
2.25% |
2.60% |
Up to and including 80% |
1.00% |
1.64% |
2.75% |
3.85% |
Up to and including 85% |
1.75% |
2.90% |
3.50% |
5.50% |
Up to and including 90% |
2.00% |
4.75% |
4.25% |
7.00% |
Up to and including 95% |
2.75% |
6.00% |
4.25%* |
* |
90.01% to 95% — |
2.90% |
N/A |
* |
N/A |
Extended Amortization Surcharges |
||||
Greater than 25 years, up to and including 30 years: 0.20% |
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Energy-Efficient Housing Made More Affordable with Mortgage Loan Insurance
More than 17 percent of the energy consumed in Canada is used to run our homes. Buying an energy-efficient home or making energy-saving renovations can offer big savings. A 10% CMHC mortgage loan insurance premium refund and extended amortization period without surcharge may be available when you use CMHC insured financing to purchase an energy-efficient home or make energy-saving renovations.
Help the Planet, Help Your Wallet
CMHC has added environmentally friendly features to the Mortgage Loan Insurance it offers. You could also have the added flexibility of a longer amortization (the period of time required to repay your mortgage) from 25 years to a maximum of 35 years for loan-to-value ratios in excess of 80% (or 40 years for loan-to-value ratios of 80% or less), significantly reducing your monthly payments.
The Government of Canada actively promotes energy conservation and initiatives to reduce greenhouse gas emissions that contribute to climate change.
How It Works
Obtaining an energy assessment through an NRCan qualified energy advisor.
NRCan has developed an energy assessment and labeling system to help homeowners make energy-saving choices when buying a home or renovating. For a fee, a NRCan qualified energy advisor will evaluate the house to determine its energy efficiency rating on a scale of 0 – 100.
For more information, including information on the Government of Canada’s ecoEnergy initiatives, please visit:
http://ecoaction.gc.ca/buildings