Ontario Mortgage Insurance Calculator
'/%3E%3Ccircle cx='48' cy='39' r='19' fill='%23f2c9a5'/%3E%3Cpath d='M27 35c3-16 39-17 42 2-8-8-27-9-42-2z' fill='%23374151'/%3E%3Cpath d='M21 86c5-24 49-28 56 0z' fill='%232563eb'/%3E%3Ccircle cx='41' cy='41' r='2' fill='%23111827'/%3E%3Ccircle cx='55' cy='41' r='2' fill='%23111827'/%3E%3Cpath d='M42 52c4 3 9 3 13 0' stroke='%2392400e' stroke-width='3' fill='none' stroke-linecap='round'/%3E%3C/svg%3E)
Reviewed by Calculator Editorial Team
Ontario Mortgage Insurance (OMI) is a premium paid by borrowers to protect lenders against losses if the borrower defaults on their mortgage. This calculator helps you determine how much OMI you'll pay based on your mortgage amount and down payment.
What is Ontario Mortgage Insurance?
Ontario Mortgage Insurance (OMI) is a type of mortgage insurance that protects lenders against losses if a borrower defaults on their mortgage. It's required for borrowers who make a down payment of less than 20% of the home's purchase price.
OMI is different from private mortgage insurance (PMI) which is common in the United States. In Ontario, OMI is mandatory for certain mortgages and is regulated by the Ontario government.
The insurance premium is typically paid monthly and is added to your mortgage payment. Once you've built up 20% equity in your home, you can request to have the OMI removed from your mortgage.
How is Ontario Mortgage Insurance Calculated?
The Ontario Mortgage Insurance premium is calculated based on the mortgage amount and the down payment percentage. The formula used is:
OMI Premium = (Mortgage Amount × Premium Rate) / 12
Where Premium Rate is determined by your down payment percentage:
- 5% down payment: 4.05% premium rate
- 10% down payment: 3.15% premium rate
- 15% down payment: 2.40% premium rate
- 20% down payment: 0% premium rate (OMI not required)
For example, if you have a $300,000 mortgage with a 10% down payment, your OMI premium would be:
OMI Premium = ($300,000 × 3.15%) / 12 = $79.38 per month
The premium is calculated monthly and added to your mortgage payment. The total amount you'll pay in OMI over the life of your mortgage depends on how long you keep the insurance.
When is Ontario Mortgage Insurance Required?
OMI is required for most mortgages in Ontario when the down payment is less than 20% of the home's purchase price. Here are the key scenarios where OMI applies:
- First-time home buyers with less than 20% down payment
- Repeat home buyers with less than 20% down payment
- Buyers purchasing a new home with less than 20% down payment
- Buyers purchasing a resale home with less than 20% down payment
There are some exceptions where OMI may not be required, such as:
- Buyers with a down payment of 20% or more
- Buyers who qualify for the First-Time Home Buyer Program with a down payment of 5% or more
- Buyers who have a co-signer with a down payment of 20% or more
It's important to check with your mortgage lender to confirm whether OMI is required for your specific situation, as requirements can vary.
How to Reduce Ontario Mortgage Insurance Costs
While OMI is mandatory for certain mortgages, there are ways to reduce your costs:
- Increase your down payment - The higher your down payment, the lower your OMI premium will be. Aim for at least 20% to avoid OMI entirely.
- Shop around for the best rates - Different lenders may offer different OMI premium rates, so compare offers from multiple financial institutions.
- Consider a longer mortgage term - A longer mortgage term may result in a lower monthly OMI premium, though you'll pay more interest over time.
- Look for government programs - Some government programs may offer lower OMI premiums or other incentives for eligible buyers.
Remember that reducing your OMI costs may come with trade-offs, so carefully consider your options before making a decision.
Comparison of Mortgage Insurance Options
Here's a comparison of the different mortgage insurance options available in Ontario:
| Insurance Type | Minimum Down Payment | Premium Rate | Duration |
|---|---|---|---|
| Ontario Mortgage Insurance (OMI) | 5% or more | Varies (4.05% for 5% down, 3.15% for 10% down, etc.) | Until 20% equity is achieved |
| Private Mortgage Insurance (PMI) | 3% or more | Varies by lender | Until 20% equity is achieved |
| First-Time Home Buyer Program | 5% or more | 0% OMI premium | First 5 years |
This table provides a general comparison, but actual rates and requirements may vary depending on your specific situation and the lender you choose.
Frequently Asked Questions
How much does Ontario Mortgage Insurance cost?
The cost of Ontario Mortgage Insurance varies based on your mortgage amount and down payment percentage. Use our calculator to estimate your monthly premium.
When can I stop paying Ontario Mortgage Insurance?
You can request to have your Ontario Mortgage Insurance removed once you've built up 20% equity in your home. Your lender will review your equity position and may approve the removal.
Is Ontario Mortgage Insurance the same as private mortgage insurance?
No, Ontario Mortgage Insurance (OMI) is different from private mortgage insurance (PMI). OMI is mandatory for certain mortgages in Ontario and is regulated by the government, while PMI is typically optional and offered by private lenders.
Can I get a mortgage in Ontario with less than 5% down?
In most cases, no. Most lenders in Ontario require at least 5% down payment for a mortgage. However, there may be exceptions or special programs that allow for lower down payments.