Mortgage Insurance

Put less than 20% down in Canada and mortgage default insurance is mandatory. It protects the lender — not you — if you default, and you pay for it. The premium is a percentage of the mortgage amount (not the price), added to the loan so you pay interest on it for years. This calculator shows the premium, the resulting mortgage balance, and the provincial sales tax on the premium that you must pay in cash on closing day.

What it answers, and what it doesn't

It answers: the premium for your down payment tier, the tax on that premium in the four provinces that levy one, and your true mortgage amount after the premium is capitalized. It also shows the 0.20% surcharge if you take a 30-year amortization.

It does not answer: whether your file will be approved for insurance (property type, price cap, and borrower rules still apply), whether the premium is refundable if you sell early (it is not), or whether you can port the insurance to a new property (portability rules vary by lender — ask). It also does not tell you whether a bigger down payment is worth it; it just prices each tier so you can compare.

Every input, explained

Purchase price and down payment. Together these set your loan-to-value, which selects the premium rate: 4.00% for 5%–9.99% down, 3.10% for 10%–14.99%, 2.80% for 15%–19.99%, and no premium at 20% or more. The common error is applying the rate to the price. It applies to the mortgage amount. On a $750,000 purchase with 15% down, the 2.80% hits the $637,500 mortgage, not the $750,000 price.

Amortization: 25 or 30 years. Thirty-year insured amortizations — available since December 2024 to first-time buyers and buyers of newly built homes — carry a 0.20% surcharge on the premium. Forgetting to tick 30 years understates the premium.

Province. Four provinces tax the premium and the tax is cash on closing: Ontario 8%, Quebec 9%, Saskatchewan 6%, Manitoba 7%. BC, Alberta, and the Atlantic provinces do not. Buyers routinely budget the premium (it is in the mortgage, after all) and get blindsided by the tax (it is not).

How the math works

The calculator subtracts the down payment from the price to get the base mortgage, looks up the premium rate for the down payment tier, and multiplies. If the amortization is 30 years, it adds 0.20% of the mortgage as a surcharge. The premium total is added to the mortgage — that is the balance you actually pay interest on. Then it multiplies the premium by the provincial tax rate to get the cash due on closing. The three insurers (CMHC, Sagen, Canada Guaranty) charge identical rates, so "CMHC insurance" as a generic term is fine for the math.

Worked example: $750,000 purchase in Quebec, 15% down, 25-year amortization

• Down payment: 15% × $750,000 = $112,500
• Base mortgage: $750,000 − $112,500 = $637,500
• Premium rate for 15% down: 2.80%
• Premium: 2.80% × $637,500 = $17,850
• True mortgage balance: $637,500 + $17,850 = $655,350 — you pay interest on the premium for the life of the loan
• Quebec PST on the premium: 9% × $17,850 = $1,606.50, due in cash on closing

Compare that with putting 10% down instead: the mortgage would be $675,000, the premium rate 3.10%, and the premium $20,925 — an extra $3,075 added to the loan for a $37,500 smaller down payment. The tier boundaries are where the real decisions live.

The real cost isn't the premium — it's financing the premium

$17,850 is what gets added to the mortgage. It is not what the premium actually costs by the time the loan is paid off. Because the premium is financed rather than paid in cash, you pay interest on it for the full amortization — and that interest is a second, larger cost most buyers never see coming. On the same example (4.65% contract rate, 25-year amortization): financing the $17,850 premium instead of paying it upfront adds $100.29 to the monthly payment, which compounds to $12,236.66 in extra interest over 25 years. Add the $1,606.50 Quebec PST paid in cash, and the premium that looked like $17,850 on closing day actually costs $31,693.16 across the life of the mortgage — 78% more than the sticker number.

Provincial quirks and edge cases

The premium tax is invisible until closing. In Ontario, Quebec, Saskatchewan, and Manitoba, this tax cannot be added to the mortgage. On a 4.00%-tier premium it runs into the thousands. Your lawyer collects it with the rest of the closing funds — confirm it is in their figure.

The $1.5 million ceiling. Since 15 December 2024, insurance is available on purchases up to $1.5 million. At $1.5 million and above, no insurance is offered, which is why the minimum down payment jumps to 20% there. A price that appraises above the cap can collapse an insured approval.

No insurance on refinances or rentals. Refinances are generally not insurable (limited exceptions), and non-owner-occupied rental property requires 20% down with no insurance option. If your plan involves refinancing to pull equity within a few years, know the insurance does not transfer to the new loan.

The premium is not refundable. Sell after two years and the premium you paid is gone. Portability — moving the insurance to a new property and new mortgage — exists at some lenders with conditions. Ask before assuming.

Questions to ask your mortgage broker

1. Which insurer is on my file, and what are their portability rules if I sell and buy again?
2. If I stretch my down payment to the next tier boundary, exactly how much premium do I save?
3. Is the provincial tax on the premium included in my lawyer's closing figure, or do I need to budget it separately?
4. If I take the 30-year amortization, how does the 0.20% surcharge change my premium and my payment?