What is CMHC Insurance Premium? How is it helful buying home with 5 % down ?

Hello Everyone,

For last few weeks I am getting some enquiries regarding CMHC insurance premium.....

First of all....What is CMHC stands for? Canadian Mortgage and Housing Corporation.

You might have heard that if you can buy your own dream home with 5 % downpayment and most importantly you pay the same mortgage rate as the person who has 20 % downpayment.
You must be thinking, how is it possible ............?

Yes, it is possible through the CMHC insurance...so those who has 5 % towards downpayment and wants to buy house has to purchase CMHC insurance.....then CMHC takes the buyer under it's huge umbrella. That way CMHC assures the financial institute (bank), that due to unavoidable circumstances the buyer defaults, financial institute(Bank) is not at risk of loosing money. So the bank can easily land money to those buyers at LOW rate.

Loan-to-Value	Premium on Total Loan		Premium on Increase to Loan Amount for Portability and Refinance
	Standard Premium	Self-Employed without 3rd Party Income Validation	Standard Premium	Self-Employed without 3rd Party Income Validation**
Up to and including 65%	0.50%	0.80%	0.50%	1.50%
Up to and including 75%	0.65%	1.00%	2.25%	2.60%
Up to and including 80%	1.00%	1.64%	2.75%	3.85%
Up to and including 85%	1.75%	2.90%	3.50%	5.50%
Up to and including 90%	2.00%	4.75%	4.25%*	7.00%*
Up to and including 95%	2.75%	N/A	4.25%*	*
90.01% to 95% — Non-Traditional Down Payment***	2.90%	N/A	*	N/A
Extended Amortization Surcharges Add 0.20% for every 5 years of amortization beyond the 25 year mortgage amortization period.†

At the other end those buyer's who has 20 % or more toward downpayment, they don't need to buy CMHC Insurance because they put 20 % towards house price so it is low risk investment for banks so bank's easily land them money.

So in our great country of Canada, the goverment is so generous and helpful to those people who has little courage and desire to move in their own dream home.

Hope this article would have answered all the questions you had about CMHC Insurance.

Rate has been given in above table. If you have any questions regarding donot hasitate to call me or email me.
Best regards.