CMHC And GE Mortgage Insurance
Financial institutions are required by law to insure all mortgages with a loan to value ratio of less than 80%. This insurance protects the lender against borrower default, enabling you to purchase a home with a lower down payment.
Using features like CMHC's Flex Down Product, borrowers can receive the 5% from borrowed funds, lender incentives and other sources. These funds cannot be tied to the purchase or sale of the property. The premium for this is 2.9%. There are strict lending guidelines for the Flex Down Product.
GE/CMHC Premiums
These are calculated as a percentage of the mortgage amount and depend on the amount of down payment. The lower the down payment the larger the fees. These fees are usually added to the loan amount.
|
Loan Amount as a % Home Value |
Purchase Premium on Total Loan Amount |
||
| 25 Year AM | 30 Year AM | 35 Year AM | |
|
Up to and including 85% |
1.75% |
1.95% |
2.15% |
|
Up to and including 90% |
2.00% |
2.20% |
2.40% |
|
Up to and including 95% |
2.75% |
2.95% |
3.15% |
|
Borrowed down payment |
2.90% |
3.10% |
3.30% |
If down payment borrowed with 95% financing, Premium is 2.9%.