How Much Does CMHC Mortgage Insurance Cost in BC? Premium Rates Explained

If you are buying a home in British Columbia with less than 20% down, mortgage loan insurance is usually part of the deal. The question most buyers ask is simple: how many dollars will it add? The answer depends on how much of the home's value you are borrowing.

This article focuses on the cost. It walks through CMHC's premium schedule, shows a worked example, explains who pays, and covers the price cap and amortization limits that affect how the insurance works in practice.

This article covers the law of British Columbia.

CMHC's premium schedule by loan-to-value

Loan-to-value (LTV) compares your mortgage to the home's value. The smaller your down payment, the higher your LTV and the higher the premium rate. CMHC's schedule for homeowner loans is charged on the total loan amount.

The premium is a one-time charge, and it may be added to the insured loan.

What it looks like at different down payments

Here is how the premium rate changes as your down payment grows. A bigger down payment means you borrow a smaller share of the home's value, and the rates come from the schedule above.

If a buyer with a strong credit history qualifies to use a non-traditional down payment, such as an unsecured personal loan or line of credit, at 90.01 to 95% LTV, the rate is 4.50% instead of 4.00%.

For a $1 million home, the minimum down payment is 5% of the first $500,000 ($25,000) plus 10% of the remaining $500,000 ($50,000), which is $75,000, but only if the lender and insurer accept it. The premium is then a percentage of the loan amount, at the rate for your loan-to-value. Adding the premium to the mortgage means you borrow more and pay interest on it over time, so ask your lender to show the total cost both ways.

Who pays the premium

CMHC explains that mortgage loan insurance protects the lender if the borrower cannot make payments. The lender pays the premium but will likely pass the cost on to you. You can pay it as a lump sum or add it to the mortgage and pay it over time.

In other words, the insurance protects the lender rather than you, even though the cost of the premium usually ends up with you.

When insurance applies, and the price cap

• Insurance is typically needed if your down payment is less than 20% of the purchase price.
• A lender may require insurance even with 20% down, usually if you are self-employed or have a poor credit history.
• The insured mortgage price cap rose from $1 million to $1.5 million on December 15, 2024, so homes under $1.5 million can be bought with less than 20% down using default insurance.
• Insurance is not available on homes priced at $1.5 million or more, so those buyers need 20% down and an uninsured mortgage.
• The Financial Consumer Agency of Canada's down payment page still shows older $1 million wording, so check the cap with your lender.

The minimum down payment is 5% of the first $500,000 plus 10% of the amount above that, up to the cap. For a price of $1.5 million or more, it is 20% of the whole price. Normally, the minimum down payment must come from your own funds.

Home type and amortization

For CMHC homeowner loans, a 1 to 2 unit home needs 5% of the first $500,000 of lending value plus 10% of the remainder, for a maximum of 95% LTV. A 3 to 4 unit home needs 10% down, for a maximum of 90% LTV. The home must be intended for owner occupancy.

Rental and investment properties are not eligible for CMHC's 5%-down homeowner product, so confirm the minimum equity for a rental purchase with your lender or CMHC.

The maximum amortization for insured purchase loans is 25 years. Since December 15, 2024, 30-year amortizations are available to all first-time home buyers and all buyers of new builds. A longer amortization lowers payments but usually means more interest over the life of the mortgage.

What to do next

• Work out your likely loan-to-value at a few different down payment amounts.
• Ask your lender for the premium in dollars, and compare paying it up front with adding it to the mortgage.
• Confirm the price cap that applies to your purchase price, especially between $1 million and $1.5 million.
• Ask whether your situation, such as self-employment, means insurance is required even with 20% down.
• Ask whether you qualify for a 30-year amortization and how that changes your total interest.
• Have a lawyer review your mortgage commitment and closing documents before you sign.

Frequently asked questions