CMHC
CMHC or Canadian Mortgage and Housing Corp is Canadas major housing agency. If you intend on purchasing a house and are planning on putting less than 20% down you will be subject to CMHC fees (or other providers). These fees go towards insuring the mortgage as to protect the lenders against default and foreclosure.
Although it may seem initially that these fees are not necessary and only result in greater expenses for first time homebuyers, the reality is that these fees also help to keep interest rates lower as the risk of the bank losing money on mortgages is greatly reduced.
What can you expect to pay? Well it is actually a sliding scale depending on the amount of down payment you have (more for only 5%, less for 19,99% down). The cost of providing this insurance just rose in June 2015 to between 0.6%-3.6% of the total mortgage.
For an example – the average purchase price for a home in Edmonton is currently 347,000. At 5% down and amortized over 25 years, your mortgage would be $329,650 – this amount of mortgage would come with an insurance premium of $11,867.40.
Here is a handy calculator on the CMHC website to figure out what you may owe on your mortgage: http://www.cmhc-schl.gc.ca/en/co/buho/buho_023.cfm
NOTE – you will not have to pay these fees right up front. They are usually tacked right on to your mortgage payments and amortized throughout the term of the mortgage
