Mortgage Insurance: $0
Total Mortgage Required: $0
This user-friendly tool is designed to help you navigate CMHC-insured mortgage options effortlessly. Simply input your purchase price and down payment to receive an instant estimate tailored to CMHC guidelines.
CMHC (Canada Mortgage and Housing Corporation) insurance is a mandatory requirement for homebuyers in Canada who make a down payment of less than 20% of the property’s purchase price. This insurance protects lenders against the risk of borrower default, allowing them to offer mortgages to a broader range of buyers.
For borrowers, CMHC insurance makes homeownership more accessible by enabling them to secure financing with a lower down payment, often at competitive interest rates. The insurance premium is calculated based on the size of the mortgage and the down payment percentage, and it can be added to the mortgage amount or paid upfront.
Our tool is designed to help you navigate CMHC-insured mortgage options effortlessly.
To be eligible for mortgage default insurance through the Canada Mortgage and Housing Corporation (CMHC), you must meet specific criteria. Notably, significant changes are set to take effect on December 15, 2024, which will impact eligibility requirements. Here’s an overview:
1. Minimum Down Payment:
- For homes priced at $500,000 or less, a minimum down payment of 5% is required.
- For homes priced between $500,000 and $1.5 million, the minimum down payment is 5% for the first $500,000 and 10% for the remaining portion.
- Homes priced above $1.5 million are not eligible for CMHC insurance.
2. Maximum Purchase Price:
- Effective December 15, 2024, the maximum purchase price for CMHC-insured mortgages will increase from $1 million to $1.5 million, aligning with current housing market realities.
3. Amortization Period:
- Currently, the maximum amortization period for insured mortgages is 25 years.
- Starting December 15, 2024, 30-year amortizations will be available to all first-time homebuyers and purchasers of new builds, reducing monthly mortgage payments and making homeownership more accessible.
4. Credit Score:
- At least one borrower (or guarantor) must have a minimum credit score of 680.
5. Debt Service Ratios:
- Your Gross Debt Service (GDS) ratio should not exceed 39% of your gross household income.
- Your Total Debt Service (TDS) ratio should not exceed 44% of your gross household income.
6. Property Requirements:
- The property must be located in Canada and intended for owner-occupancy.
These criteria are designed to ensure that borrowers can manage their mortgage obligations effectively. The upcoming changes aim to make homeownership more attainable for Canadians by reflecting current market conditions and providing more flexible financing options.
Not all mortgage lenders in Canada offer CMHC-insured mortgages. Only lenders approved under the National Housing Act (NHA) can provide mortgages with CMHC insurance.
Federally regulated financial institutions, such as banks and federal credit unions, are typically NHA-approved lenders. However, private mortgage lenders often do not offer insured mortgages due to the lack of NHA approval.
Many provincial credit unions have obtained NHA approval through their provincial credit union associations. For example, in Ontario, the Credit Union Central of Ontario Ltd. is an NHA-approved lender, enabling its member credit unions—such as DUCA Credit Union, FirstOntario Credit Union, and Meridian—to offer insured mortgages.
Some lenders are restricted to offering insured mortgages only within certain provinces. For instance, Alterna Savings provides insured mortgages exclusively in Ontario, while ATB Financial does so only in Alberta.
All major Canadian banks and numerous B-lenders are authorized to offer CMHC-insured mortgages.
