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About Canada Mortgage Housing Corporation (CMHC)

Good housing is fundamental to the Canadian quality of life. Its essential to our economy, too. The housing industry directly or indirectly employs one in five Canadians. No other single industry in Canada has such a large impact on our economy.

Canada Mortgage Housing Corporation (CMHC) plays an important role in Canada's housing industry. As a crown corporation and the administrator of the National Housing Act for the federal government, CMHC designs programs to help Canadians in need get adequate housing.

Mortgage Loan Insurance

Under Canadian Law, certain lending institutions cannot provide first mortgage financing in excess of 75% of the purchase price or lending value of a home unless the mortgage is insured.

Lenders feel confident about making loans for 95%  of the value of the property when borrowers buy mortgage loan insurance. An insurer of mortgage loans, such as CMHC takes the risk of lending money to home buyers.

Many Canadians own homes today because they were able to insure their mortgage loans with CMHC and present themselves to lenders as low-risk investments.

Home buyers who require mortgage loan insurance obtain it through the lender as part of the process of taking out a mortgage.

What you pay

There are two costs to buying mortgage loan insurance from CMHC the application fee and the premium. Like all insurance premiums, those for mortgage loan insurance are priced according to risk.

Application fee

$165

The Premium

The following table outlines the various premiums that are applicable based on the degree of risk involved as determined by the Loan/Value.

CMHC Premiums
Loan Size (% of Property Value) Premium (% of Loan)
Up to 65% 0.50%
Up to 75% 0.75%
Up to 80% 1.25%
Up to 85% 2.00%
Up to 90% 2.50%
Up to 95% 3.75%

This premium can be paid as a lump sum or you can add it to your mortgage loan.

Minimum Down Payment

* 5% for purchases up to $250,000 in large urban areas.

* 5% for purchases up to $175,000 in smaller urban and rural areas.

 

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