Everything You Should Know About Mortgage Insurance

Everything You Should Know About Mortgage Insurance

Posted: March 18 2022

Did you know you can recover 25% of your mortgage insurance back just for purchasing a green home?

Mortgage insurance is mandatory to purchase in Canada if you are putting less than 20% down payment on your new home. This kind of mortgage loan is called an insured mortgage. This insurance protects the lender in case the borrower defaults on the loan. Mortgages with a down payment of 20% or more is considered a conventional mortgage. Conventional mortgages do not require the purchase of mortgage insurance.

The most common mortgage insurers are CMHC (Canada Mortgage and Housing Corporation) and Genworth. Your lender typically chooses the insurer for you and will give you the option to pay for your insurance upfront or roll it into your monthly mortgage payments. The premium is based on the loan-to-value ratio (mortgage loan amount divided by the purchase price). 1

The good news is there is a CMHC Green Home Refund that can refund up to 25% of the mortgage loan insurance amount! A mortgage loan insurance refund of 15% or 25% is available to customers who buy a new, energy efficient home and have their mortgage insured with CMHC. Our attached garage homes, detached garage homes, duplexes and townhomes are eligible for a 15% refund on the CMHC mortgage loan insurance because of the energy efficient features we include! If you choose to boost the energy efficiency of your Landmark home or make it Net Zero, the refund would be 25% of your mortgage loan insurance.

Here’s an example of what you could save:
$400,000 home
5% down payment = $20,000
CMHC mortgage loan insurance = $15,200
15% refund = $2,280 Savings
25% refund = $3,800 Savings

These savings are based on the performance of your homes Energuide rating. Read our Energuide blog for all the details!

1. “Mortgage-Loan-Insurance-and-Premiums.” CMHC, www.cmhc-schl.gc.ca/en/professionals/industry-innovation-and-leadership/industry-expertise/resources-for-mortgage-professionals/mortgage-loan-insurance-and-premiums. 

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