1. What is a Mortgage Calculator with CMHC Premium?

Definition: This calculator estimates monthly mortgage payments including the Canada Mortgage and Housing Corporation (CMHC) insurance premium.

Purpose: It helps Canadian home buyers understand their complete monthly mortgage obligations when making a down payment of less than 20%.

2. How Does the Calculator Work?

The calculator uses the formula:

Where:

• \( M \) — Monthly mortgage payment (CAD)
• \( P \) — Principal loan amount (CAD)
• \( r \) — Monthly interest rate (annual rate ÷ 12)
• \( n \) — Total number of payments (term in years × 12)
• \( \text{CMHC\_premium} \) — Total CMHC insurance premium divided by loan term

Explanation: The standard mortgage formula calculates base payments, then adds the amortized CMHC premium.

3. Importance of CMHC Insurance

Details: CMHC insurance is required for Canadian mortgages with less than 20% down payment, protecting lenders against default.

4. Using the Calculator

Tips: Enter the principal amount, annual interest rate (default 5%), loan term in years (default 25), and total CMHC premium (default $0).

5. Frequently Asked Questions (FAQ)

Q1: How is CMHC premium calculated?
A: Premium is 0.6%-4.5% of the loan amount, based on down payment percentage. Use our CMHC Premium Calculator to determine this value.

Q2: Is CMHC premium added to monthly payments?
A: Typically yes, it's either added to the principal or paid as part of monthly payments.

Q3: When is CMHC insurance required?
A: For down payments less than 20% of the home's purchase price.

Q4: Can I avoid CMHC insurance?
A: Yes, by making a down payment of 20% or more of the purchase price.

Q5: Does this include property taxes?
A: No, this calculates principal, interest, and CMHC only. Taxes and insurance would be additional.