Understanding Down Payments and CMHC Insurance

Understanding Down Payments and CMHC Insurance

Buying your first home can feel overwhelming—especially when it comes to understanding how much money you actually need upfront. This article breaks down the basics of down payments and CMHC insurance so you can confidently plan your purchase.

In Canada, the minimum down payment depends on the purchase price:

• - Under $500,000: 5% minimum
• - $500,000–$999,999: 5% on the first $500,000, 10% on the remainder
• - $1M+: 20% minimum required

If your down payment is less than 20%, you’ll need mortgage default insurance through CMHC (or similar providers). This protects the lender but adds a premium to your loan amount.

Premiums vary based on your down payment percentage and are typically rolled into your mortgage.

💡 Ridge Pro Tip: Boost your credit score before applying for a mortgage—CMHC premiums and interest rates both improve with better credit.

🔗 Related Resources:

• See also: 'What Is a Mortgage Pre-Approval?'
• See also: 'Closing Costs First-Time Buyers Forget'

📞 Ready to get pre-approved? Contact Ridge Estate for a one-on-one buyer consultation.