Quebec 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 Quebec CMHC insurance
Jamie David, Sr. Director of Marketing and Mortgages
CMHC insurance regulation is set by the federal government and therefore, premium rates in Quebec are the same across Canada. Insurance premium rates range from 2.80% to 4.00% of your mortgage amount. The insurance premium is then added to your mortgage amount and paid off over your amortization period in your monthly mortgage payments. Federal regulations on CMHC insurance 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.
QST on Mortgage Default Insurance – Quebec
In Quebec, QST on mortgage default insurance must also be paid. This tax is 9.975% of the CMHC insurance premium and is paid in full when your house closes. The QST is different from your insurance premium as it is not added to your mortgage balance, but due in a lump sum cash payment.
Mortgage default insurance rates
The CMHC insurance rate 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% |
The insurance premium is then calculated using the rate and your mortgage amount. For CMHC insured homes, your amortization period must be 25 years or less.
Sample Calculation for CMHC insurance in Quebec:
For 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:
Quebec CMHC insurance calculation
- $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) × 9.98% (QST tax rate)
= $804 (QST)
You will pay the insurance premium of $8,060 in your monthly payments and the $804 QST with your closing costs.
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% |