CMHC insurance,
and what it costs.
Putting less than 20% down means mortgage insurance. For physicians using low down payment programs, knowing the premium and the trade-off matters.
The short answer.
CMHC mortgage insurance is required on Canadian mortgages with less than 20% down, with premiums of 2.80% to 4.00% of the mortgage amount depending on the loan-to-value ratio, added to the mortgage principal rather than paid up front. Physician programs allow these insured purchases at 10% down, trading the premium for the ability to buy sooner.
When insurance is required.
Any Canadian mortgage with less than 20% down is a high-ratio mortgage and requires default insurance, most often through CMHC. With 20% or more down, the mortgage is conventional and no insurance is required.
Physician programs commonly allow 10% down on an owner-occupied home, which means an insured mortgage. The premium is the cost of buying with less money down rather than waiting to save 20%.
What the premium costs.
On a $1.2M insured mortgage the premium runs roughly $33,000 to $48,000, added to the principal and paid down over the amortization rather than at closing.
Sources
Insured vs conventional for physicians.
Insured (low down payment) lets you buy sooner and keep cash or PLOC room intact, at the cost of the premium. Conventional (20%+ down) avoids the premium but ties up more capital up front. The right choice depends on how quickly you want to buy, your down payment sources, and whether the PLOC is better deployed elsewhere.
Questions doctors ask.
All guidesWhen do physicians need CMHC insurance?
When they put less than 20% down. Physician programs commonly allow 10% down on owner-occupied homes, which makes the mortgage insured. With 20% or more down, the mortgage is conventional and no insurance is required.
How much does CMHC insurance cost?
The premium is 2.80% to 4.00% of the mortgage amount depending on the loan-to-value ratio. It is added to the mortgage principal and paid over the amortization, not up front.
Is it better for a physician to put 20% down or use a low down payment program?
It depends. A low down payment lets you buy sooner and preserve cash or PLOC room at the cost of the premium; 20% down avoids the premium but ties up more capital. The best choice depends on timing and your down payment sources.
