Question 18

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Question: Number 18 - Hi. I was working with a bank in BC and I put 25% down for my down payment on a 200,000 home. Now when I get the papers to sign it says I owe $1000 in CMHC costs. Can you tell me why? I thought if you have 20% or more down you don't have to get CMHC involved.

Answer: Generally you do not need Mortgage Insurance with 20% down. There are exceptions however depending on the location, or type of property being bought. As noted the CMHC Insurance fee is low, and this may have saved you from appraisal and other costs. Also you may be getting a better interest rate from your bank because of the insurance.