MORTGAGES INSURED BY CANADA MORTGAGE & HOUSING                         (By CMHC)

Little or no down payment?  Get into your home sooner with as little down as 5%

When you need a mortgage loan that is more than 75% of the purchase price of your home, mortgage loan insurance is required. It protects the lender and, by law, most Canadian lending institutions require it.

Having mortgage loan insurance means that if you, the borrower; default on your mortgage, the lender is paid back by the insurer – CMHC. With the risk of losing their money removed, lenders have the confidence to make mortgage loans of up to 95% of the purchase price of the home (subject to price ceilings).  There are certain restrictions as to the maximum purchase price allowed dependent on location.

That means your down payment can be as little as 5% of the house price. With mortgage loan insurance, many Canadians who might be unable to obtain a 25% down payment can still buy a home.

What does mortgage loan insurance cost?

There are two components an application fee and an insurance premium. The application fee typically ranges from $75.00 to $235.00 and mortgage loan insurance premiums range from 0.5%-3.75% of the amount of your loan (additional charges may apply), depending on the size of the loan and the value of your home. The premium can be added to your mortgage loan and paid off as part of your regular mortgage payments, or paid off in a lump sum at the time of purchase to save interest charges on the premium itself.

Where can mortgage loan insurance be obtained?

See your lender, who can obtain mortgage loan insurance from. CMHC. They will insure mortgages of up to 95% of the home's purchase price or the market value of the property, whichever is less. (Restrictions may apply. Contact your local lender.)

Both new and resale homes are eligible. Here are some of the criteria that must be met:

• The home must be in Canada and must be your principal residence.
• Housing payments, including principal, interest, property taxes, heating (P.I.T.H.), the annual site lease in the case of leasehold tenure and 50% of applicable condominium fees, can't be more than 32% of your gross household income (GDS – Gross debt service ratio).
• Your total debt load can't be more than 40% of your gross household income (TDS- Total Debt Service ratio) . Other criteria apply and are subject to change. For details, please contact CMHC or your local lender.

Right now, 3 million Canadians own homes with insured mortgages.

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