CMHC Portability

• Available for all CMHC-insured mortgage loans covering residential properties originally insured by CMHC through emili on or after April 1^st, 1996.
• Borrower(s) on the new loan must be the same as those on the original CMHC-insured loan.
• The premium is the lesser of Premium on Increase to Loan Amount or the Premium on Total Loan Amount. Where new Premium on Total Loan Amount is paid, a premium credit may be available.
• Maximum one CMHC-insured property per borrower/co-borrower at any given time.
• The property must be located in Canada, be suitable and available for full time / year round occupancy and have year round access including homes located on an island (via a vehicular bridge or ferry).

* Current LTV on existing property: (outstanding balance ÷ original purchase price)

For straight portability, the following three criteria must be met:

• The amortization period of the new loan cannot exceed the amortization remaining from the original loan (up to a maximum of 25 years).
• The new loan-to-value (LTV) is equal to or less than the current LTV of existing property.
• The new loan amount is equal to or less than the current outstanding balance.

Example

A property was purchased 3 years ago for $200,000 at 90% LTV. The current outstanding balance is $172,000.

• The new property purchase price is $210,000
• A new mortgage is sought for $172,000 and the amortization will be maintained at 22 years

What is the premium to be charged?

Facts:

• Outstanding balance = $172,000. New loan $172,000. This means no new money
• Current property LTV (original purchase price) = $172,000 / $200,000 = 86%
• New property LTV= $172,000 / $210,000 = 82% & therefore LTV has decreased

Since there is no new money, no increase in LTV or increase in amortization, there is no premium to be charged.  This qualifies as a straight port.

For portability with increase to loan amount, the following criteria must be met:

• The maximum amortization will be the greater of the remaining amortization from original loan (up to a maximum of 25 years) or blended amortization (a blended amortization period is subject to a 0.60% surcharge which is applied to the Increase to Loan Amount)**.
• The maximum new loan-to-value (LTV) is 90% (CMHC may consider a higher LTV ratio, up to 95%, when the new LTV ratio is equal to or less than the original LTV ratio (at time of original purchase)).

Example

A property was purchased 5 years ago for $200,000 at 90% LTV with a 25 year amortization.

• The outstanding balance is $162,000
• The property was just sold and a new one will be purchased for $300,000 at 90% LTV but the amortization will be maintained.

What is the premium to be charged?

Facts:

• Outstanding balance = $162,000. New loan $270,000, which means $108,000 new money
• Current property LTV:  $162,000 / $200,000 = 81%
• New property LTV= $270,000 / $300,000 = 90%. LTV slightly increased
• Amortization remains in line

This means $108,000 (new money) X 6.25% (premium for LTV of 90%) = $6,750
or
$270,000 (entire loan amount) X 3.10% = $8,370

The first option is less expensive

** Blended amortization: [(outstanding balance x Remaining Amortization) + (New funds x up to 25  years)]/Total Loan Amount

For portability with increase to loan-to-value, the following four criteria must be met:

• The maximum amortization will be the remaining amortization from original loan (up to a maximum of 25 years)
• The new loan amount is equal to or less that the outstanding balance.
• The new LTV on subsequent property is greater than the current loan-to-value (LTV) on existing property
• The maximum new LTV for the subsequent property is 90% (CMHC may consider a higher LTV ratio, up to 95%, when the new LTV ratio is equal to or less than the original LTV ratio (at time of original purchase)).

A property was purchased 3 years ago for $300,000 at 85% LTV.

• The outstanding balance is $240,000 with a 22 year amortization remaining
• The property was just sold and a new property will be bought with a purchase price of $240,000, a LTV of 90% (Ie: loan of $216,000) and will maintain the remaining amortization

Facts:

• Outstanding balance = $240,000 & New loan = $216,000. No new money
• Current property LTV= $240,000/$300,000 = 80%
• New property LTV= $216,000 /$240,000 = 90%, which means an increase in LTV
• Amortization remains in line; no increase

Given the increase in LTV, the risk has changed and there will be a premium charged.

What is the premium to be charged?

Step 1. Calculate the difference in LTV: 90% - 80% = 10% increase in LTV

Step 2. Increase in LTV multiplied by the purchase price of the property: 10% X $240,000 = $24,000

Step 3. Take the above value and multiply it by the new LTV premium top-up factor: $24,000 X 6.25% = $1,500.00 is the premium due.

The Portability feature may allow for a Premium Credit to reduce the premium payable on a new loan insurance application. The Premium Credit is based on the elapsed time (up to a maximum of 24 months) from the original closing date of the existing CMHC-insured loan to the application received date for the new CMHC-insured loan request.

Full amortization of 25 years is available.

Example

A property was purchased 8 months ago for $200,000 at 90% LTV. The current outstanding balance is $182,000.

• The new property purchase price is $225,000
• A new mortgage is sought for $210,000 and requires an amortization of 25 years

What is the premium to be charged?

Facts:

• Amortization needs to be extended to 25 years. No top-up option is available
• New property LTV= $210,000 /$225,000 = 93%; LTV>90%. No top-up option is available.
• Previous purchase within 2 years of new purchase= Port credit!

Step 1. Calculate full premium for new loan: $210,000 x 4% = $8,400

Step 2. Premium paid 8 months ago was $5,580

Step 3. Premium was paid within 1 year (and longer than 6 months ago); therefore 50% of $5,580 ($2,790) will be credited toward the new premium:  $8,400 - $2,790 = $5,610 is the premium due

Learn about mortgage insurance premium costs with our Premium Information for Homeowner and Small Rental Loans.

Contact your Regional Manager, Client Relations or call our Underwriting Centre team at 1-888 GO emili (1-888-463-6454).

This material is a quick reference tool for CMHC’s common Mortgage Loan Insurance. Additional conditions may apply.

This information is subject to change at any time. Please verify with CMHC that you have the most up to date information before the loan is processed.