Mortgage default insurance (CMHC) calculator

How default insurance works

With less than 20% down, Canadian lenders require mortgage default insurance — it protects the lender, and you pay for it. The premium is a percentage of the mortgage that rises as the down payment shrinks: on the standard schedule, 2.80% of the loan at 15% down, 3.10% at 10% down, and 4.00% at 5% down. All three insurers (CMHC, Sagen, Canada Guaranty) use the same schedule. The premium is almost always added to the mortgage — so you pay interest on it for the whole amortization — while Ontario's sales tax on the premium is due in cash at closing.

Minimum down payments: 5% of the first $500,000 plus 10% of the portion above, and homes of $1.5 million or more require at least 20% down (they can't be insured). Longer amortizations available to some insured buyers can carry premium surcharges — your mortgage professional will price your exact case. The rules, the worked numbers and where the money can come from are in how much down payment do you need in Ottawa.