When mortgage insurance is required
In Canada, default insurance is generally required when the down payment is under 20% (a high-ratio mortgage). The premium is a percentage of the loan, set by loan-to-value. Typical owner-occupied rates: 4.00% at 5–9.99% down, 3.10% at 10–14.99% down, 2.80% at 15–19.99% down. At 20% down or more, insurance is usually not required.
The premium is often added to the mortgage balance. It protects the lender, not you. Minimum down payment is commonly 5% on the first $500,000 of price and 10% on the rest, up to the current insured-price cap (check CMHC; it has been $1.5 million). This page does not apply amortizations over 25 years, non-traditional down payments, or energy-efficient discounts.
Common questions
Is this paid in cash at closing?
Usually it is added to the loan. Some provinces charge sales tax on the premium that must be paid up front.
Does this include my monthly payment?
No. Use the mortgage payment tool for principal and interest. Add the premium to the loan first if you will finance it.
Why does 5% down cost more than 10%?
Higher loan-to-value is riskier for the insurer, so the percent is higher, and the loan is larger.