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High Ratio Mortgage Insurance
When a mortgage exceeds 75% of the sale price
of a property, the borrower is required to pay for insurance which protects the
lender. The insurance is provided by CMHC. The minimum down payment is
calculated using the following formula:
- 90% of the first $180,000
- 80% of the balance
The insurance premium is calculated upon a sliding scale based on the amount of
mortgage as follows:
| Mortgage |
Insurance Premium |
| Up to $ including 80% |
1.25% |
| Up to $ including 85% |
2.0% |
| Up to $ including 90% |
2.5% |
| Up to $ including 95% |
2.5% |
Here are a few examples assuming the minimum
down payment in each case, that the mortgage insurance premium is added to the
mortgage (it can be added to the mortgage or paid on closing) and a first
mortgage rate of 9.5%.
|
Example One |
| Sale
Price |
$200,000 |
| 10%
down payment |
-
$20,000 |
|
Balance |
$180,000 |
| CMHC
Insurance |
+$4,500 |
|
New Principal
|
$184,500 |
|
= First mortgage at 9.5% pays $1588.62 a month
(principle & interest) |
|
|
|
Example Two |
|
| Sale
Price |
$200,000 |
| 25%
down payment |
-
$50,000 |
|
Balance |
$150,000 |
|
= First mortgage @ 9.5% pays $1291.55 a month
(principle & interest) |
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First Time Home Buyers: 95%
financing is available to 1st time home buyers subject to the following
criteria: |
 | Canadian purchase to become principle
residence |
|
| Maximum debt load to 42% |
|
| $250,000 ceiling in Toronto area |
|
| Must lock into 5-year mortgage |
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| Maximum 35% of gross family income to
carry mortgage, taxes, and heating. |
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* This is a guide only. The lender
will provide final costs *
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