High-ratio mortgages (down payment under 20%) require default insurance to protect the lender. CMHC is the best-known provider, but private insurers use similar premium schedules.
Premiums are calculated as a percentage of the mortgage amount and tier by LTV. Lower down payments mean higher premium rates.
Impact on your loan
The premium is typically added to your mortgage principal, which slightly increases your monthly payment and total interest over the amortization period.
Reaching 20% down avoids the premium entirely and may unlock better rates from some lenders.
Frequently asked questions
?How are CMHC fees calculated?
CMHC (SCHL) premiums depend on your down payment percentage. With 5% down the premium is about 4% of the loan; with 10% down about 3.1%; with 15% down about 2.8%. The premium is usually added to your mortgage balance.
?What is CMHC mortgage insurance?
Default mortgage insurance protects the lender when your down payment is below 20%. CMHC, Sagen, and Canada Guaranty are the main providers. The premium is a one-time cost added to your loan in most cases.
?How much is CMHC on a $500,000 home?
With 10% down ($50,000) on a $500,000 home, the loan is $450,000 and CMHC premium is roughly $13,950 (3.1%). Use the calculator above with your exact down payment.
?Is CMHC insurance the same as home insurance?
No — CMHC (default) insurance protects the lender if you default. Home insurance protects the property itself and is a separate required cost.