CMHC Mortgage Insurance Calculator CMHC or Canada Mortgage And Housing Corporation Insurance is commonly known as Mortgage Default Insurance. This insurance is mandatory in all the provinces of Canada in case you need to make the down payments between 5% and 19.99%.
The Main Aim Of This Insurance The main goal of this insurance is to protect the lenders if the borrower cannot make the regular payments or stop making the payment of the loan and becomes a defaulted on the mortgage loan. The lender can claim the insurance to cover their loss.
It is true that as a home buyer this insurance can cost you 2.80% to 4% of your total mortgage amount, but it can bring scopes to you as a Canadian to access the real estate market in this country, which is otherwise, may not be an easy matter for you.
Points You Must Know About Mortgage Insurance
- Without this insurance, the mortgage rates will be higher, because the risk of default can be increased in such cases.
- Lenders prefer to offer lowers mortgage rates to the borrowers when they know that their loan is secured because of that insurance.
- The borrowers can also afford to have mortgage loans because the rates are decreased with the help of the insurance.
How To Be Qualified For This Insurance There are some primary requirements that you have to fulfill to become eligible for this insurance.
- The maximum amortization period for the insured property is 25 years.
- The insurance is not applicable if you are buying a home which costs more than $1 million.
- If you are purchasing the home with the price between $500,000 and, $999,999 then you need to make a higher down payment.
Where To Get The Insurance Apart from CMHC there are two other entities in Canada who can offer you this insurance. They are Genworth Financial and Canada Guaranty.