1. What is a CMHC Mortgage Calculator?

Definition: This calculator computes monthly mortgage payments for Canadian home buyers who require CMHC insurance (for down payments less than 20%).

Purpose: It helps home buyers estimate their monthly payments including the CMHC insurance premium added to the mortgage principal.

2. How Does the Calculator Work?

The calculator uses the formula:

Where:

• \( M \) — Monthly mortgage payment (CAD)
• \( P \) — Loan principal (CAD)
• \( \text{cmhc\_premium} \) — CMHC insurance premium (P × cmhc_rate)
• \( r \) — Monthly interest rate (annual rate ÷ 12)
• \( n \) — Total number of payments (term in years × 12)

Explanation: The CMHC premium is added to the principal, and the standard mortgage formula calculates the payment on this adjusted amount.

3. Importance of CMHC Insurance

Details: CMHC insurance is mandatory for Canadian mortgages with less than 20% down payment. It protects lenders against default and allows buyers to purchase homes with smaller down payments.

4. Using the Calculator

Tips: Enter the loan amount, annual interest rate, loan term in years, and CMHC insurance rate (default 4%). All values must be > 0 except CMHC rate which can be 0 for ≥20% down payment.

5. Frequently Asked Questions (FAQ)

Q1: When is CMHC insurance required?
A: For down payments less than 20% of the home's purchase price in Canada.

Q2: How is the CMHC premium determined?
A: It's a percentage of the loan amount based on the down payment size (typically 2.8%-4% of the mortgage).

Q3: Can I pay the CMHC premium separately?
A: No, it's usually added to the mortgage principal and financed over the loan term.

Q4: Does this include property taxes?
A: No, this calculates only the principal and interest portion of your payment.

Q5: What's the benefit of putting 20% down?
A: You avoid CMHC insurance costs and may qualify for better interest rates.