1. What is CMHC Insurance?

CMHC (Canada Mortgage and Housing Corporation) insurance is mortgage loan insurance that protects lenders against mortgage default. It's required for homebuyers with a down payment of less than 20% of the purchase price.

2. How Does the Calculator Work?

The calculator uses the CMHC premium formula:

Where:

• Mortgage Amount — Total amount of the mortgage in CAD
• CMHC Rate — Percentage rate based on loan-to-value ratio (see table below)

CMHC Premium Rates:

Loan-to-Value Ratio	Premium Rate
Up to 65%	0.60%
Up to 75%	1.70%
Up to 80%	2.40%
Up to 85%	2.80%
Up to 90%	3.10%
Up to 95%	4.00%

3. Importance of CMHC Insurance

Details: CMHC insurance enables Canadians to purchase homes with down payments as low as 5%. It protects lenders, which allows them to offer lower interest rates on high-ratio mortgages.

4. Using the Calculator

Tips: Enter the mortgage amount in CAD and your down payment percentage. The calculator will determine your loan-to-value ratio and apply the appropriate CMHC premium rate.

5. Frequently Asked Questions (FAQ)

Q1: Who pays for CMHC insurance?
A: The borrower pays the premium, which can be added to the mortgage amount and paid over time.

Q2: Is CMHC insurance mandatory?
A: It's required for mortgages with less than 20% down payment (high-ratio mortgages).

Q3: Can I avoid CMHC insurance?
A: Yes, by making a down payment of 20% or more of the purchase price.

Q4: Is CMHC insurance refundable?
A: No, the premium is non-refundable once the mortgage is funded.

Q5: Does CMHC insurance protect me as a borrower?
A: No, it protects the lender. However, it enables you to get a mortgage with a smaller down payment.