If you buy a home in Canada with less than 20% down, you will usually need mortgage default insurance, commonly called CMHC insurance. The premium is based mainly on your loan-to-value ratio, which compares your mortgage amount with the home’s purchase price. A CMHC mortgage insurance calculator helps estimate the premium before you decide how much to put down.

What CMHC mortgage insurance does

CMHC mortgage loan insurance protects the lender, not the borrower, if the borrower stops making payments. It can still help buyers because it allows qualified borrowers to buy with a smaller down payment, sometimes as low as 5% for eligible homes. According to CMHC, buyers with a down payment under 20% need mortgage loan insurance, and insured mortgages can be available up to 95% of the purchase price for eligible homes (CMHC, 2018).

This is different from optional mortgage life, disability, or critical illness insurance. CMHC insurance is tied to default risk for the lender and is part of the mortgage approval process.

How the premium is calculated

The basic calculation has three parts:

  1. Start with the purchase price.
  2. Subtract the down payment to find the base mortgage amount.
  3. Apply the CMHC premium rate that matches the loan-to-value ratio.

CMHC says the premium is calculated as a percentage of the loan and is based on the size of the down payment (CMHC, 2018). As of June 2026, CMHC lists standard premium rates from 0.60% for loan-to-value up to and including 65%, to 4.00% for loan-to-value from 90.01% to 95%. Rates and program rules can change, so verify current terms with CMHC, your lender, or a licensed mortgage professional before deciding.

For example, suppose a home costs C$600,000 and the buyer has C$50,000 down. The mortgage before insurance is C$550,000. The loan-to-value ratio is about 91.67%, so the standard CMHC premium rate would fall in the 90.01% to 95% band. A 4.00% premium on C$550,000 would be C$22,000.

Many borrowers add the premium to the mortgage instead of paying it upfront, which increases the mortgage balance and interest paid over time.

Read also: How to Refinance Your Mortgage in Canada: Complete 2027 Guide

Do not forget provincial sales tax

CMHC notes that premiums in Quebec, Ontario and Saskatchewan are subject to provincial sales tax, and that this tax cannot be added to the mortgage loan amount (CMHC, 2018). That means the tax may be a closing cost you need in cash.

Also budget for legal fees, land transfer tax where applicable, adjustments, moving costs and inspections. The Financial Consumer Agency of Canada provides mortgage education on down payments, terms, amortization and closing costs for Canadian borrowers (FCAC, 2025).

What the calculator helps you compare

A CMHC insurance calculator is most useful when you test different down payment amounts. A slightly larger down payment may move the mortgage into a lower loan-to-value band, lowering the insurance premium. But using all available cash for the down payment can leave you short for closing costs or emergency savings.

The calculator also helps separate your mortgage term from your amortization. In Canada, the term is the contract period, commonly 1 to 5 years, while amortization is the longer payoff schedule, often up to 25 or 30 years depending on the mortgage and borrower profile.

Important limits

Mortgage default insurance, the OSFI mortgage stress test, lender policies, land transfer tax and buyer programs vary by province, territory, property type and lender. Eligibility, maximum purchase price, down payment source, debt service ratios and insurance availability can change.

This article is general educational information only. It is not personalized financial, lending, legal or tax advice, and it is not an offer or commitment to lend. Confirm your numbers with a licensed mortgage broker, your financial institution, CMHC or a qualified tax professional for your own situation.