CMHC mortgage default insurance

Put down less than 20% of the purchase price and your mortgage needs default insurance — a policy that protects the lender, not you, if you stop paying. CMHC (and its private competitors) charge a one-time premium for this, calculated as a percentage of the loan and normally rolled into the mortgage itself. It only applies to homes priced below $1,500,000; above that, insured mortgages aren’t available at all and 20% down is effectively mandatory.

Minimum down payment

The minimum down payment itself is tiered, not a flat percentage: 5% on the first $500,000 of the price, and 10% on every dollar above that (up to the insured price cap). A $700,000 home, for example, needs 5% of $500,000 plus 10% of the remaining $200,000 — more than a flat 5% would suggest.

The premium ladder

The insurance premium itself scales with how thin your down payment is — the less you put down, the higher the percentage of the loan CMHC charges. The calculator uses the current published ladder (see the registry table above for the exact tier boundaries and rates). Two wrinkles worth knowing: choosing a 30-year amortization (available only to first-time buyers or buyers of newly built homes) adds a 0.2 percentage-point surcharge on top of the standard premium; and in Ontario, the premium itself is subject to 8% retail sales tax, which — unlike the premium — cannot be rolled into the mortgage and must be paid in cash at closing.