Calculate your CMHC mortgage default insurance premium and see how it affects your mortgage amount and monthly payment.
If your down payment is less than 20% of the home's purchase price, you're required to pay for mortgage default insurance in Canada. The largest provider is CMHC (Canada Mortgage and Housing Corporation), though Sagen and Canada Guaranty also offer it. The insurance protects the lender — not you — but it enables lower down payments and typically better mortgage rates.
| Down Payment | LTV Ratio | Premium Rate | Example ($500K home) |
|---|---|---|---|
| 5% to 9.99% | 90.01–95% | 4.00% | $19,000 |
| 10% to 14.99% | 85.01–90% | 3.10% | $13,950 |
| 15% to 19.99% | 80.01–85% | 2.80% | $11,760 |
| 20%+ | ≤ 80% | 0% | $0 |
CMHC insurance costs real money — typically $100–$20,000 added to your mortgage. But it enables homeownership with as little as 5% down and often results in lower mortgage rates than uninsured mortgages at the same lender.
The trade-off: you start with less equity and more mortgage. On a $600,000 home with 5% down, you'd owe $594,800 after CMHC is added to your mortgage. But you get into the market years earlier — and in a rising market, the equity gains often outweigh the insurance cost.
The straightforward answer: save 20% down. On a $600,000 home, that's $120,000. For most Canadians, getting there takes 5–10 years of disciplined saving. Our down payment calculator can show you a timeline.
Other strategies: use the Home Buyers' Plan (withdraw up to $35,000 from RRSP) and the FHSA (up to $40,000 lifetime) to accelerate savings.
Every dollar you save over the 5% minimum brings you closer to the 20% threshold where CMHC disappears. KOHO's savings goals help you get there. Get $100 cash with code 45ET55JSYA.
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