# CMHC fees on a 20% down payment house



## Four Pillars (Apr 5, 2009)

I have a question about CMCH fees. I keep reading about how if you have a 20% down payment, you don't have to pay any CMCH fees. 

But when I look at the CMCH page and calculator - they indicate that a 20% down mortgage will be insured for 1%.

My question is - when you get a mortgage from financial institution with 20% down, do they get insurance or no? Is that why there is no fee? Or is there a one percent fee?


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## Sampson (Apr 3, 2009)

No fee.


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## HaroldCrump (Jun 10, 2009)

There is no CMHC premium payable by the home owner when 20% or more down payment is made, as far as I know.
I don't recall paying any CMHC premium.

The 1% that you saw may be a reference to the "bulk" insurance that CMHC provides directly to the banks for insuring their MBS bonds.
This 1% is probably embedded deep within the mortgage rate and/or the fees that the banks charge you for doing the mortgage.

Can you post a link to the page or calculator.


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## CanadianCapitalist (Mar 31, 2009)

If you have a down payment of 20%, mortgage insurance is not required. I just obtained one, so I'm pretty sure of this 

That's because when there is a downpayment of less than 20%, lenders are *required* by law to obtain mortgage insurance and they will pass along this cost to borrowers.


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## Four Pillars (Apr 5, 2009)

Thanks everyone. I was pretty sure there was no fee with 20% down, but I got confused by the CMCH table.

This is the link to the premium table http://www.cmhc-schl.gc.ca/en/co/moloin/moloin_005.cfm

I checked the FAQ and they also answer the question:

_3. When does my lender need mortgage loan insurance? 
Typically lenders will require mortgage loan insurance if a borrower has a down payment of less than 20% of the purchase price of the home.

By protecting lenders against borrower default, CMHC Mortgage Loan Insurance creates an opportunity for Canadians to realize their dreams of homeownership._

I'm not sure when the insurance would be required if 20% down payment was provided. Maybe if their credit rating isn't very good?


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## HaroldCrump (Jun 10, 2009)

Four Pillars said:


> I'm not sure when the insurance would be required if 20% down payment was provided. Maybe if their credit rating isn't very good?


Right, in the end, it is _up to the lender_ whether mortgage insurance is required or not.
As the FAQ you posted says : _lenders will require mortgage loan insurance_
That table lists insurance premiums for LTV ratios as low as 65%.

IOW, it is up to the bank/lender.

Typically for 20% or more DP, they don't ask for mortgage insurance.
One of the reasons could be because they plan to package and sell off the mortgage as MBS, which is covered by CMHC bulk insurance.
So they are protected anyway.


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## albertGQ (Jun 11, 2011)

That 1% is only if the lender requires insurance. Just because you have 20% down, doesn't necessarily mean no insurance is required. For example a lot of lenders won't mortgage a property conventionally in a remote lending area. So even if you do have 20% down, you may still require insurance


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