Cal11 calculator
Search calculator...

Cmhc Premium Calculator Ontario

Reviewed by Calculator Editorial Team

When purchasing a home in Ontario, you may need to pay CMHC (Canada Mortgage and Housing Corporation) premium insurance. This calculator helps you estimate your CMHC premium based on your mortgage amount and down payment.

What is CMHC Premium?

CMHC premium is a type of mortgage default insurance that protects lenders against losses if a borrower defaults on their mortgage. It's required for certain types of mortgages in Ontario, particularly those with a down payment of less than 20%.

The premium is calculated as a percentage of the mortgage amount and is paid monthly along with your mortgage payments. The premium rate varies based on factors like your down payment percentage and the type of mortgage.

CMHC premium is different from private mortgage insurance (PMI). While PMI is offered by private insurers, CMHC premium is specifically for mortgages insured by the Canada Mortgage and Housing Corporation.

How to Calculate CMHC Premium

The basic formula for calculating CMHC premium is:

CMHC Premium = (Mortgage Amount × Premium Rate) / 12

Where:

  • Mortgage Amount = Purchase Price - Down Payment
  • Premium Rate = Based on your down payment percentage (varies by CMHC guidelines)
  • 12 = Number of months in a year (since premium is paid monthly)

The premium rate is determined by your down payment percentage according to CMHC guidelines:

  • 5% down payment: 4.00% premium rate
  • 10% down payment: 3.15% premium rate
  • 15% down payment: 2.85% premium rate
  • 20% down payment: 0% premium (no insurance required)

Factors Affecting CMHC Premium

Several factors influence the amount of CMHC premium you'll pay:

  1. Down Payment Percentage: Higher down payments result in lower premium rates.
  2. Mortgage Amount: Larger mortgages will result in higher premium amounts.
  3. Mortgage Term: Longer terms may affect the premium calculation.
  4. Property Type: Some property types may have different premium rates.
  5. Location: In some cases, the property location may affect the premium.

Note that these are general guidelines. Actual premium amounts may vary based on specific mortgage terms and conditions provided by your lender.

Example Calculation

Let's say you're purchasing a home in Ontario with a purchase price of $400,000 and you're putting down 10% as a down payment.

  1. Calculate the mortgage amount: $400,000 - ($400,000 × 10%) = $360,000
  2. Determine the premium rate: 10% down payment → 3.15% premium rate
  3. Calculate the annual premium: $360,000 × 3.15% = $11,340
  4. Calculate the monthly premium: $11,340 / 12 = $945

In this example, your estimated monthly CMHC premium would be $945.

FAQ

Do I need CMHC premium if I have a 20% down payment?
No, if you have 20% or more down payment, you typically don't need to pay CMHC premium as it's not required for mortgages with 20% or higher down payments in Ontario.
Is CMHC premium refundable if I sell my home?
Yes, CMHC premium is generally refundable if you sell your home within a certain period (usually 90 days after the premium was first paid). The amount refunded depends on how much of the premium you've paid.
Can I pay my CMHC premium upfront?
No, CMHC premium must be paid monthly along with your mortgage payments. It cannot be paid upfront.
How does CMHC premium affect my mortgage payments?
CMHC premium is added to your monthly mortgage payment. It's typically included in the total amount you pay each month, along with principal, interest, and other fees.