BC CMHC Insurance
In Canada, home buyers with less than 20% down payment require mortgage default insurance, or CMHC insurance. Mortgage default insurance protects lenders in the event a home buyer defaults. Thanks to this protection, lenders can offer lower mortgage rates for mortgages with lower down payments.
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A guide to British Columbia CMHC insurance
Jamie David, Sr. Director of Marketing and Mortgages
CMHC insurance regulation and premium rates in British Columbia are the same across Canada. Insurance premium rates range from 2.80% to 4.00% of your mortgage amount. Federal regulations on CMHC insurance include the following:
- CMHC insurance is required on all homes with less than 20% down payment.
- CMHC insurance is not available for homes purchased for more than $1 million, therefore requiring homeowners to put more than 20% down
- The maximum amortization period on a CMHC insured mortgage 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
British Columbia Mortgage Default Insurance Rates
The CMHC insurance premium is calculated as a percentage of your mortgage amount. This percentage varies depending on your down payment percentage.
| Down payment (% of home’s price) | 5% - 9.99% | 10% - 14.99% | 15%-19.99% | 20% or higher |
| CMHC insurance premium | 4.00% | 3.10% | 2.80% | 0% |
Note: your amortization period must be 25 years or less.
Sample Calculation for CMHC insurance in British Columbia
Let’s say you have bought a $300,000 home with a $40,000 down payment and an amortization period of 25 years. Your insurance premium would be calculated as follows:
- $40,000 (down payment) ÷ $300,000 (home price)
= 13.33% (down payment percentage) - $300,000 (home price) - $40,000 (down payment)
= $260,000 (mortgage before CMHC) - $260,000 (mortgage before CMHC) × 3.10% (CMHC tax rate)
= $8,060 (CMHC insurance premium) - $260,000 (mortgage before CMHC) + $8,060 (CMHC insurance premium)
= $268,060 (total mortgage)
You will pay the insurance premium of $8,060 in your monthly payments.
British Columbia mortgage default insurance rates with a non-traditional down payment
Non-traditional sources of down payment include borrowed funds and gifts from non-immediate family members. Using a non-traditional source will incur a surcharge on your CMHC insurance for down payments from 5% to 9.99%
| Down payment (% of home’s price) | 5% - 9.99% | 10% - 14.99% | 15%-19.99% | 20% or higher |
| CMHC insurance premium | 4.50% | 3.10% | 2.80% | 0% |
British Columbia mortgage default insurance rates for self-employed, non-verified income
Self-employed home buyers without 3rd-party income validation are also charged higher insurance premiums. The minimum down payment required is 10%, and insurance premiums on down payments from 10% - 19.99% are higher than those of regular applicants.
| Down payment (% of home’s price) | 5% - 9.99% | 10% - 14.99% | 15%-19.99% | 20% or higher |
| CMHC insurance premium | N/A | 4.75% | 2.90% | 0% |