What is CMHC insurance and why do I need to purchase it ?
Whenever you take a new mortgage, purchase or refinance, you will require by law, to have the mortgage insured against default if you require more than 75% of the appraised value of selling price of the, whichever is less. In Canada, there are 2 sources of mandatory insurance: CMCH and Gen Worth. There is only 2 ways you can avoid this cost. One is put at least 25% of the purchase price if buying, or refinance up to 75% if you are refinancing. The second way is to use a piggyback loan such as a second mortgage to cover the difference between your down payment and the 25%.
