What is CMHC?
CMHC stands for Canada Mortgage and Housing Corporation. CMHC protects lending institutions from mortgage default by providing mortgage loan insurance.
When do I have to pay CMHC insurance?
If you purchase a home and make a down payment that is less than 20% you will be subject to paying CMHC insurance premiums. You may also need to pay CMHC if the home you want to purchase poses other risks to the lender such as a poor location, etc.
Buying extra life insurance that is attached to your mortgage may be a good idea for some folks; however, there are a few things you should consider before making your decision.
1. Do you already have life insurance? You may already have adequate life insurance through your work or another company. If you already have enough to cover all expenses plus your mortgage, then you have no need for additional insurance. However, if you dig up your paperwork and discover that you don’t have enough to cover all anticipated expenses plus your mortgage, you may very well benefit from buying mortgage life insurance.