NWT 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 Northwest Territories CMHC insurance
Jamie David, Sr. Director of Marketing and Mortgages
In Northwest Territories, CMHC insurance premium rates range from 2.80% to 4.00% of your mortgage amount. These rates are the same across all of Canada. CMHC insurance regulations are also consistent across Canada and include the following:
- CMHC insurance is required on all homes with less than 20% down payment.
- Houses 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 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.
Mortgage default insurance rates
| 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% |
The mortgage default insurance premium is calculated as a percentage of your mortgage amount. This percentage varies depending on your down payment percentage.
Sample Calculation for CMHC insurance in Northwest Territories:
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.
Mortgage default insurance rates in Northwest Territories with a non-traditional down payment
Using non-traditional sources of down payment will increase your mortgage default insurance premium. For down payments from 5% to 9.99%, your mortgage rate will increase to 2.90%. Non-traditional sources of down payment include borrowed funds, and gifts from non-immediate family members.
| 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% |
Mortgage default insurance rates in Northwest Territories for self-employed, non-verified income
Self-employed home buyers are also charged higher insurance premiums and must follow additional regulations. Home buyers must pay a minimum down payment of 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% |