Get into your home sooner. Mortgage Loan Insurance helps you do it. Put as little as 5% down.
When you need a mortgage loan that is more than 80% 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 or a private company1. 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).
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 20% down payment can still buy a home.
CMHC 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 ratio).
Your total debt load can't be more than 40% of your gross household income (TDS ratio). Other criteria apply and are subject to change. For details, please contact CMHC or your local lender.
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