1. What is CMHC Default Insurance?

CMHC (Canada Mortgage and Housing Corporation) default insurance 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 rates based on loan-to-value ratio:

Where:

• Premium — Insurance cost added to your mortgage
• Mortgage — Your mortgage amount in CAD
• Value — Property purchase price in CAD

Premium Rates:

• Up to 65% LTV: 0.60%
• 65.01% to 75% LTV: 1.70%
• 75.01% to 80% LTV: 2.40%
• 80.01% to 85% LTV: 2.80%
• 85.01% to 90% LTV: 3.10%
• 90.01% to 95% LTV: 4.00%

3. Importance of CMHC Insurance

Details: CMHC insurance enables homebuyers to purchase homes with down payments as low as 5%. The premium protects lenders and allows for more competitive mortgage rates.

4. Using the Calculator

Tips: Enter your mortgage amount and property value in Canadian dollars. The calculator will determine your loan-to-value ratio and apply the appropriate premium rate.

5. Frequently Asked Questions (FAQ)

Q1: Who pays for CMHC insurance?
A: The borrower pays the premium, which is typically added to the mortgage amount.

Q2: Is CMHC insurance mandatory?
A: It's required for mortgages with less than 20% down payment in Canada.

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

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

Q5: Are there alternatives to CMHC insurance?
A: Yes, other providers include Sagen and Canada Guaranty, with similar premium structures.