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Ontario CMHC Insurance

In Canada, homebuyers 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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CMHC insurance regulation and premium rates in Ontario are the same across Canada. Insurance premium rates range from 1.80% to 4.00% of your mortgage amount. Federal regulations on CMHC insurance include the following:

  • CMHC insurance must be purchased for all homes with less than 20% down payment.
  • Homes 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 CMHC insured mortgages 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


PST on Mortgage Default Insurance – Ontario

Ontario charges PST on mortgage default insurance. In Ontario this tax is 8% of the CMHC insurance premium, and must be paid in full when your house closes. The PST is therefore different from the premium as it is not added to your mortgage balance.


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 and amortization period

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 Ontario:

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)

  • $8,060 (CMHC insurance premium) × 8.00% (PST tax rate)
    = $645 (PST)

You will pay the insurance premium of $8,060 in your monthly payments and the $645 PST with your Ontario closing costs. These closing costs can include fees for home inspectors in Ontario and real estate lawyers in Ontario.



Mortgage default insurance rates in Ontario with a non-traditional down payment

Using non-traditional sources of down payment will incur a surcharge on your CMHC insurance for down payments from 5% to 9.99%. Non-traditional sources 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 for self-employed, non-verified income

For self-employed home buyers without 3rd-party income, 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%

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