Calculate Cmhc Fees Ontario
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Reviewed by Calculator Editorial Team
When purchasing a home in Ontario, you may need to pay CMHC (Canada Mortgage and Housing Corporation) fees. These fees help protect lenders against default and provide down payment assistance. This guide explains how CMHC fees work, how to calculate them, and how they affect your mortgage in Ontario.
What Are CMHC Fees?
CMHC fees are charges that homebuyers in Ontario may need to pay when they take out a mortgage with a down payment of less than 20%. These fees help protect lenders against default and provide down payment assistance through the CMHC Insurance Premium.
The CMHC fee is typically calculated as a percentage of the mortgage amount and is added to the total mortgage cost. The fee is paid to CMHC and is not a tax or part of the mortgage interest.
Important Note
CMHC fees are not required for all mortgages. If you have a down payment of 20% or more, you may not need to pay CMHC fees. However, some lenders may still require CMHC insurance even with a larger down payment.
How CMHC Fees Are Calculated
The CMHC fee is calculated based on the mortgage amount and the type of insurance you choose. There are two main types of CMHC insurance:
- CMHC Insurance Premium: This is the standard insurance that protects the lender against default.
- CMHC Down Payment Assistance: This provides down payment assistance to eligible first-time homebuyers.
The CMHC fee is typically calculated as a percentage of the mortgage amount. The exact rate depends on the type of insurance and the mortgage amount. For example:
CMHC Fee Formula
CMHC Fee = Mortgage Amount × CMHC Rate
Where the CMHC Rate varies based on the mortgage amount and insurance type.
For example, if you have a mortgage of $300,000 and the CMHC rate is 3.5%, your CMHC fee would be:
$300,000 × 0.035 = $10,500
CMHC Fee Structure
The CMHC fee structure in Ontario is based on the mortgage amount and the type of insurance. The following table shows the typical CMHC rates for different mortgage amounts:
| Mortgage Amount | CMHC Rate (Standard Insurance) | CMHC Rate (Down Payment Assistance) |
|---|---|---|
| $0 - $50,000 | 3.5% | 3.5% |
| $50,001 - $100,000 | 3.0% | 3.0% |
| $100,001 - $150,000 | 2.5% | 2.5% |
| $150,001 - $200,000 | 2.0% | 2.0% |
| $200,001 - $250,000 | 1.5% | 1.5% |
| $250,001 - $300,000 | 1.0% | 1.0% |
| $300,001 - $350,000 | 0.5% | 0.5% |
| Over $350,000 | 0.25% | 0.25% |
These rates are subject to change and may vary depending on the lender and the specific mortgage terms.
How to Reduce CMHC Fees
There are several ways to reduce or avoid CMHC fees when purchasing a home in Ontario:
- Increase Your Down Payment: The most effective way to avoid CMHC fees is to have a down payment of 20% or more. This eliminates the need for CMHC insurance.
- Choose a Lender That Offers CMHC-Free Mortgages: Some lenders offer CMHC-free mortgages for eligible borrowers, even with a down payment of less than 20%.
- Consider a First-Time Homebuyer Program: If you qualify, you may be able to participate in a first-time homebuyer program that provides down payment assistance and reduces or eliminates CMHC fees.
- Shop Around for the Best Rate: Different lenders may offer different CMHC rates, so it's worth comparing offers to find the best deal.
Tip
Before finalizing your mortgage, make sure to confirm with your lender whether CMHC fees apply to your specific situation. Some lenders may have special programs or exemptions that can help reduce or eliminate CMHC fees.
FAQ
Do I need to pay CMHC fees if I have a 20% down payment?
Not necessarily. While a 20% down payment typically eliminates the need for CMHC insurance, some lenders may still require CMHC insurance even with a larger down payment. It's best to confirm with your lender.
How do I know if I qualify for CMHC down payment assistance?
To qualify for CMHC down payment assistance, you must be a first-time homebuyer, have a low income, and meet other eligibility criteria. You can apply for CMHC down payment assistance through a participating lender.
Are CMHC fees tax deductible?
No, CMHC fees are not tax deductible. They are a separate charge added to your mortgage and are not a tax or part of the mortgage interest.
Can I pay CMHC fees upfront?
Yes, you can pay CMHC fees upfront if you prefer. However, most lenders require you to include the CMHC fees in your mortgage and pay them over the life of the loan.