Use the CMHC Down Payment Calculator to Determine Your Mortgage Insurance

Aiming to purchase a new house? The rising cost of real estate in Canada may make purchasing a home seem unattainable. You are at least partially aware of the difficulties in managing significant monthly expenses if you currently pay rent. Those monthly costs are not the issue when preparing to purchase a home; rather, the issue is saving for a down payment.

Whether you are purchasing your first home or your second or third, you will need to put down at least 20% in order to avoid being required to pay for CMHC mortgage insurance. This implies that, minus the closing cost, you will need to save at least $100,000 in order to meet the quota.

What is mortgage default insurance, or CMHC insurance? 

One option to circumvent the required 20% down payment is to pay for mortgage default insurance or CMHC insurance, which is offered by the Canadian Mortgage and Housing Corporation. 

Mortgage default insurance is required for anyone planning to purchase a property for less than $1 million with a down payment of less than 20% of the total value. It protects the lender in the unlikely event that you are unable to make your mortgage payments.

How can your mortgage default insurance be reduced?

  • Cut down on the length of amortization

Create many amortization schedules using an amortization calculator to see how much your monthly payments will increase over time under various amortization length scenarios. It’s crucial to understand that a mortgage with a down payment of less than 20% can only last for a maximum of 25 years.

  • Increase the amount of your down payment

You can explore how different down payments will impact the amount of mortgage default insurance you need by using our down payment calculator.

How can you avoid having to pay for CMHC insurance? 

The only realistic way to completely avoid having to pay for mortgage default insurance is to put down the full 20%. If you don’t have a lot of money, you can try saving some: 

  • Make use of your RRSPs, but be aware that early withdrawals can incur a tax penalty. 
  • If you made a sizable contribution to your RRSP, apply your income tax refund to it. 
  • Make use of a private mortgage lender


When you started saving for a house, your goal was to actually buy one. Paying the extra CMHC cost will enable you to accomplish your goal faster, regardless of whether you have a certain timeline in mind. It might not be a bad thing if you take the time to think through your options. 

Rely on Satbir Bhullar, an award-winning mortgage broker in Abbotsford to find out how much you can afford when purchasing a property in Canada. Satbir can negotiate with lenders to get you the best possible rate. Please be honest with yourself about your ability to finance a mortgage. Give me a call at any moment to find out your monthly mortgage amount. Use our CMHC down payment calculator in Abbotsford to determine the size of your mortgage.