Take a $650,000 home with 10% down. The CMHC premium is $18,135, which is 3.10% of the $585,000 loan. It gets added to your mortgage, so you borrow $603,135. In Ontario you also owe $1,450.80 in sales tax, paid in cash at closing.
What the premium is
CMHC insurance protects the lender if you stop paying, but you pay for it. It’s required whenever your down payment is under 20% of the price. CMHC is one of three insurers in Canada, and the other two charge similar rates, though not always identical ones.
How the premium is set
The rate depends on how much of the price you borrow.
| Down payment | Premium on the loan |
|---|---|
| 5% to 9.99% | 4.00% |
| 10% to 14.99% | 3.10% |
| 15% to 19.99% | 2.80% |
| 20% or more | None |
A longer amortization costs more. Choose 30 years on the example above, and the rate rises by 0.20 points to 3.30%, so the premium becomes $19,305.
Sales tax on the premium
Ontario, Quebec and Saskatchewan charge sales tax on the premium, at 8%, 9% and 6%. It can’t be added to the mortgage, so it is a real cash cost. You pay it in cash when you close, so put it in your budget. Other provinces don’t.
Who can be insured
The home must cost less than $1,500,000, and your down payment must meet the federal minimum. Above that price you need 20% down, and no insurance is available. The result box warns you the moment your numbers fall outside these rules, so you know before you talk to a lender or start looking at homes.
Ways to pay less
A larger down payment lowers the premium at each step, and at 20% it disappears. Going from 5% to 10% down saves a lot, since the rate drops from 4.00% to 3.10%. A 25-year amortization also costs less than 30 years.
Three down payments compared
On a $650,000 home, 10% down carries an $18,135 premium and 15% down carries $15,470. Five percent isn’t allowed at this price, because the minimum is $40,000, or 6.2%. Put 20% down and there is no premium at all. The table under the result runs the same comparison for your own price.
When you pay it, and what it doesn’t do
You don’t pay the premium at closing, since it’s added to the mortgage. You do pay interest on it, though, for as long as you have the loan. That’s why the loan in the result is higher than the price minus your down payment.
It protects the lender only. It is not mortgage life insurance, and it is not home insurance. Fall behind and you still owe the money. The insurer can pursue you for what it paid the lender.
Checking a quote and changing rates
Your lender or broker will quote the premium before you sign. Compare it with the result above. Small gaps can come from rounding or from the insurer’s own rules, which don’t always match the published tables exactly. Ask whether it’s added to the mortgage or paid up front. Most lenders add it.
Insurers can update their premium tables. The rates here follow the published tables at the date shown at the bottom of the page. Confirm current figures with your lender.
Where to go next
The premium is one piece of the cost. The mortgage payment calculator turns your total loan into a payment. The down payment calculator shows the minimum for your price, and the closing costs calculator adds the cash needed on closing day.
Frequently asked questions
What is the CMHC premium?
It is mortgage default insurance, required when your down payment is under 20%. It is a percentage of the loan and is added to the mortgage.
How much is CMHC insurance on a $650,000 home with 10% down?
$18,135, which is 3.10% of the $585,000 loan.
Do I pay sales tax on the premium?
In Ontario, Quebec and Saskatchewan, yes: 8%, 9% and 6%. It is paid in cash at closing.
Does a 30-year amortization cost more?
Yes. It adds 0.20 points to the premium rate.
Can I get insurance on a $1,600,000 home?
No. Insurance is not available at $1,500,000 or more, so you need at least 20% down.
How do I avoid the premium?
Put down 20% or more.
Sources and updates
Last reviewed: . Full disclaimer. How we build calculators. Editorial policy.
Estimate only. This calculator gives general information for planning. It is not tax, legal or financial advice, and it is not affiliated with the City of Toronto, MPAC or the Canada Revenue Agency. Results depend on the numbers you enter and may differ from official amounts. Check official sources or a qualified professional before you decide.