Mortgage Default Insurance (CMHC), Explained
What CMHC insurance costs when your down payment is under 20%, and how much you need to put down.
If your down payment is less than 20% of the purchase price, your lender is required to get mortgage default insurance — often called CMHC insurance, after Canada Mortgage and Housing Corporation, one of the three providers in Canada. It protects the lender if you default, and the premium is usually added right onto your mortgage.
How much does it cost?
| Down payment | Premium (% of mortgage amount) |
|---|---|
| 15% to 19.99% | 2.80% |
| 10% to 14.99% | 3.10% |
| 5% to 9.99% | 4.00% |
If any part of your down payment is borrowed rather than from your own savings, add another 0.20% to the premium.
Minimum down payment
You need at least 5% down on the first $500,000 of the purchase price, and 10% on the portion between $500,000 and $1.5 million. For a $600,000 home, that works out to $25,000 (5% of $500,000) plus $10,000 (10% of the remaining $100,000) — $35,000 in total, or about 5.8%.
Is there a price limit?
Homes priced at $1.5 million or more aren't eligible for mortgage default insurance — you'll need at least 20% down regardless of your situation.