What is CMHC Insurance?
If you’re planning on obtaining a mortgage of 65% or more of a property’s value ex: Obtaining a mortgage from $195,000 or more on a $300,000 property, it is considered a “high-ratio” mortgage and must be insured. The most well-known insurer is CHMC – Canada Mortgage and Housing Corporation.
CMHC Insurance protects mortgage lenders by guaranteeing them the payment if you default; BUT you’re still responsible for the debt!
While insurance premium can be paid up front on closing, it’s usually added to the amount borrowed. That does however hike the overall cost of the mortgage since you’re paying interest on that insurance premium.
For additional information on how to calculate the insurance premiums you will owe based on the mortgage amount borrowed on the property’s value (loan to value) and to find out more information on the insurance, please visit the link bellow. Some changes are taking effect as of May 1st, 2014. This table is the updated version.
If you have any further questions, consult your financial advisor, ask your questions! Understanding all aspects of your investment is the smartest approach to insure you reach your financial goals.
If you would like to be referred to a mortgage specialist or broker, please call or e-mail me and I will be happy to refer you to a trusted professional.
Click on Link: CMHC.InsurancePremiums