Mortgage loan insurance is generally required by lenders when home buyers make a down payment of less than 20% of the purchase price. Mortgage loan insurance helps protect lenders against mortgage default, and enables consumers to purchase homes with a minimum down payment starting at 5%. The Government of Canada offers government-backed mortgage insurance with restrictions through its crown agency, Canada Mortgage and Housing Corporation (CMHC).
- Minimum down payment requirement for government-backed insurance is 5%.
- Maximum mortgage amortization period is 25 years.
- Maximum home price eligible for government-backed insurance is $1 million.
- Mortgage insurance is available for both first-time and repeat home buyers.
- For home purchases under $500,000, minimum down payment is 5%. For purchases over $500,000, minimum down payment is 5% for the first $500,000 and 10% for the remainder.
- Gifted down payments from immediate relatives are acceptable for 1 to 4 unit dwellings. Other down payment sources like lender incentives and borrowed funds may also be permitted.
- Total monthly housing costs, including principal, interest, taxes, heating, lease fees (for leasehold tenure), and 50% of condo fees, should not exceed 32% of gross household income.
- Total debt load should not exceed 40% of gross household income.
- Closing costs, typically 1.5% to 4% of the purchase price, are in addition to the down payment and cover expenses like lawyer fees, taxes, and land transfer fees.
- Other requirements may apply and are subject to change. For details, please contact a lender or mortgage broker.
The CMHC Mortgage Loan Insurance premium is calculated as a percentage of the loan and is based on a number of factors such as the intended purpose of the property (owner occupied or rental), the type of loan (e.g., purchase/construction or refinance loan), and the size of down payment. See chart for premium details.
Financing Required Premium % of Loan
Up to and including 65% 0.60
Up to and including 75% 1.70
Up to and including 80% 2.40
Up to and including 85% 2.80
Up to and including 90% 3.10
Up to and including 95% 4.00
90.01% to 95% 4.50
Non-traditional Down Payment
* Premiums in Manitoba, Ontario and Quebec are subject to provincial sales tax. The provincial sales tax cannot be added to the loan amount.
*Disclaimer: The information presented serves as a general overview and may not cover all aspects of the topic. Please note that certain details may have changed or may no longer be current. For a comprehensive and up-to-date understanding, please consult authoritative sources such as the CMHC website or seek advice from a qualified professional. The user is responsible for conducting due diligence to verify the accuracy and relevance of the information before relying on it for decision-making.