Mortgage Insurance Calculator

Plan and manage your finances better by calculating your mortgage insurance amount using our calculator.

How to use our Mortgage Insurance Calculator

  • Purchase Price: Start by entering the amount of money you will have to pay to purchase your property of choice.
  • Down Payment: Enter the cash amount you will have to pay upfront for the property purchase. It ranges from 5%-20% or more, depending upon the purchase price and buyer's capacity.
Purchase price
Down payment
Total Mortgage
Mortgage Insurance
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Written By Shivani Kaul

Content Manager


What is Mortgage Insurance?

Whether you are a new homebuyer or not, you must have come across the term mortgage default insurance in your research several times.

Buying a home requires you to be ready with the calculations, in terms of assessing the purchase price of the home, the down payment, mortgage EMI, closing costs, lawyer fees, moving cost, among other expenditures. One such important expense is mortgage insurance, and if your downpayment is less than 20% of the purchase price, it is mandatory for you to add this to your mortgage cost. Your lender pays insurance premium to mortgage loan insurance company on your behalf and in turn passes this cost to you through your mortgage payment.

Mortgage default insurance, or simply, mortgage insurance protects the lender in case the buyer defaults on mortgage payment. If you are buying a home of $500,000 or less with a 5% down payment in Canada, having mortgage insurance is mandatory. Mortgage lenders make this insurance mandatory because a lower down payment (less than 20%) means that your mortgage is for a higher ratio of the purchase price, and lenders consider borrowers with high-ratio mortgages as having a higher risk of default or non-payment.

In Canada, purchasing homes between $500,000 and $1,000,000 requires a down payment of 5% on the first $500,000 and, 10% on the remainder. Houses priced over $1 million require a down payment of at least 20% on the entire purchase price.

Who provides mortgage insurance?

There are three mortgage insurance companies which provide this service:

How much is mortgage insurance?

Mortgage insurance is calculated as a percentage of the loan and is based on the size of the down payment. It may range from 0.60% to 4.5% of the mortgage amount. You can use our Mortgage Insurance Calculator to do the math for you!

How is Mortgage Insurance Calculated?

Mortgage Insurance is calculated on the percentage of the loan and down payment made towards the purchasing property. For instance, the purchasing price of your new home is $500,000 and you pay a downpayment of $25,000, you are making a down payment of 5% of the total mortgage amount. That leaves your lender with 95% mortgage loan-to-value. Your lender will have to pay an insurance premium of 4.00% at this loan-to-value, which works out to be $19,000. The lender will then pass on this cost to you through your mortgage payments.

Loan to value Premium on total loan
Up to and including 65% 0.60%
65.01% to 75% 1.70%
75.01% to 80% 2.40%
80.01% to 85% 2.80%
85.01% to 90% 3.10%
90.01% to 95% 4.00%

Source: CMHC

When you input your house purchase price and downpayment in our Mortgage Insurance Calculator, it runs an algorithm that computes your total remaining mortgage and the insurance premium you will have to pay based on the loan-to-value amount. By using our mortgage insurance calculator you are avoiding the hassle and getting accurate results that will help you plan your finances better.

Pros and Cons of Mortgage Insurance

There are many benefits of mortgage insurance, but we can’t ignore the fact that it’s an added cost to your mortgage. Here are a few reasons why mortgage default insurance is good or bad for you:

Pros of mortgage insurance

  • It is a boon for first-time homebuyers as they do not have to wait to accumulate 20% down payment to own a home. With 5% down payment and mortgage insurance, you can enter the housing market and start your real estate journey.
  • It helps borrowers get a competitive interest rate on their mortgages as the lenders feel secure. Uninsured mortgages get higher rates compared to insured mortgages.
  • In slow economic times when lending and borrowing slows down, buyers can still purchase real estate with insured mortgages and it keeps the economy afloat.

Cons of mortgage insurance

  • It’s an added cost to the mortgage and impacts the monthly payment significantly. The premium and interest amount will trickle down to your mortgage loan for the life of the mortgage.
  • The borrower’s home equity or degree of home ownership reduces because of the added mortgage insurance.
  • In some provinces like Ontario, Manitoba, Saskatchewan and Quebec, sales tax applies to the insurance premium which has to be paid upfront by the borrower.

Mortgage Calculators

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