CMHC & High Ratio Insurance Information

CMHC & High Ratio Insurance Information; what is high ratio insurance and why it is needed.

In Canada, you can purchase a home with as little as 5% down. This is called “high-ratio” financing. Once the loan request is above 80%, you fall into the high-ratio financing category and the mortgage must be insured through one of Canada’s lender insurance companies. There are 3 major mortgage insurance providers, Canada Mortgage & Housing Corporation (CMHC), Sagen, and Canada Guaranty. This is not the same as life or disability insurance. This is insurance protection for the lender for default or loss. The premium is calculated as a percentage of the mortgage and can be paid either from your own resources or added to the mortgage.

The minimum down payment requirement is 5% for up to $500,000 of the purchase price, and 10% for the portion above $500,000. Homes that are $1,000,000+ require a minimum down payment of 20%. Click here for an information link with a chart for minimum down payment amounts.

In the table below, you will see premiums for loan amounts less than 80%. This is because sometimes a bank will require the mortgage to be insured even at a lower loan-to-value ratio if the assessed risks for the property are higher, ie geographic location.

When you are obtaining a high-ratio mortgage, there are 2 approvals that take place. One from the bank and one from the insurer. The maximum available amortization for high ratio loans is 25 years. High ratio financing is available for homes under $1,000,000. For prices above $1,000,000, a minimum down payment of 20% is required.

Applicable Premiums (Owner-occupied properties) 
Loan-to-Value RatioPremium %
Up to & including 65% 0.60%
Up to & including 75% 1.70%
Up to & including 80% 2.40%
Up to & including 85% 2.80%
Up to & including 90% 3.10%
Up to and including 95%
- Traditional Down Payment*
- Non-Traditional Down Payment**

4.00%
4.50%

Down Payment Requirements

* Traditional sources of down payment include: Applicant’s savings, RRSP withdrawal, funds borrowed against proven assets, sweat equity (<50% of min. required equity), land unencumbered, proceeds from sale of another property, non-repayable gift from immediate relative, equity grant (non-repayable grant from federal, provincial or municipal agency).

**Non-traditional sources of down payment include: Any source that is arm’s length to and not tied to the purchase or sale of the property, such as borrowed funds, gifts, 100% sweat equity, lender cash back incentives.

CMHC – FAQs – Mortgage Loan Insurance

Understanding your Credit Report & Credit Score

Mortgage Overview – Government of Canada, Financial Consumer Agency.

Resources

Bank of Canada Currency Converter – an online tool for converting to and from CAD to other currencies. 

Bank of Canada Interest Rate Information – current and historical rate information, as well as bond, treasury bill, and money market yields.

BC Government Home Owner Grant Information – eligibility guidelines and the amounts available to claim.

BC Government Property Transfer Tax Guide for First-time Buyers – a detailed guide that outlines eligibility and other information.

BC’s Speculation and Vacancy Tax – information on the tax and how to declare for exemption.

Federal Government First-time Buyer Incentive – an interest free loan and shared equity program to assist first-time buyers.

Fixed or Variable Rate – important items to consider when considering taking a fixed or variable rate mortgage.

Home Buyers’ Plan (HBP) Request to Withdraw Funds from an RRSP – the withdrawal form you need to complete a withdrawal under the HBP.

Inflation Indicators Graph – a graph published by the Bank of Canada that gives a historical look at inflation figures to present day, and related definitions.

Real Estate Buyers Guide – A detailed guide outlining what you need to know for purchasing real estate in the Sea to Sky corridor, prepared by the law firm of Race & Company LLP.

Reverse Mortgage Information – a great information page that summarizes key components of what is a reverse mortgage and who is eligible.

Spagnuolo & Company GST Calculator – an online GST calculator from the law firm, Spagnuolo & Company.

Strata Housing Information  – a BC government web site that provides a comprehensive overview of strata housing.

Understanding your Credit Report & Credit Score – from the Financial Consumer Agency of Canada.

Whistler Housing Authority – all the information you need for WHA properties in Whistler. 

Mortgage Insurers of Canada

Canada Guaranty

CMHC

Sagen

Realtor.ca

REW

Whistler Listings Systems  (WLS)

Zolo