What does mortgage loan insurance cost?
There are two components an application fee and an insurance premium. The application fee typically ranges from $75.00 to $235.00.
The mortgage loan insurance premium is calculated as a percentage of the loan and is based on the size of the downpayment in relation to the total purchase price. For example, a downpayment of 25% would incur an insurance premium of .75% of the total loan value and a downpayment of 5% would incur an insurance premium of 3.75% of the total loan value.
Homeowner mortgage loan insurance premiums vary according to the loan-to-value ratio.
| Effective July 14, 2003 |
| Loan Amount as a % of the Value of the Home | Purchase Premium on Total Loan | Premium on Increase to Loan Amount for Portability and Refinance * |
Up to and including 65% | 0.50% | 0.50% |
Up to and including 75% | 0.65% | 2.25% |
Up to and including 80% | 1.00% | 2.75% |
Up to and including 85% | 1.75% | 3.50% |
Up to and including 90% | 2.00% | 4.25% |
Up to and including 95% | 3.25% | — |
* For Portability and Refinance, the premium is the lesser of the premium on the increase to the loan amount or, the Purchase premium on the total loan. In the case of Portability, a premium credit may be available under certain conditions to reduce the Purchase premium.
Note: See your lender for premium surcharges and other terms and conditions which continue to apply. |
You can pay this premium in a single lump sum (saving interest on this charge), or add it to your mortgage and include it in your monthly payments.
Where can mortgage loan insurance be obtained?
See your lender, who can obtain mortgage loan insurance from CMHC or a private insurer.
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 Martin Zielinski- your Mississauga Real estate agent.
