Conventional vs. CMHC
When does CMHC's premium pay for itself?
Conventional offers no premium and a shorter amortization. CMHC-insured loans charge a premium (capitalized into the loan) in exchange for dramatically longer amortization, lower DCR, and higher LTV. This tool sizes all three side-by-side on identical NOI and shows when the premium is recovered through cash-flow uplift.
Uninsured · 1.25x DCR · 25yr
Conventional
Max loan
$9,600,769
LTV 48.00% · cap 75%
Rate6.25%
Amortization25 yrs
Min DCR1.25x
Premium—
Equity required$10,399,231
Annual debt service$760,000
DCR achieved1.25x
Cash flow Y1$190,000
Cash-on-cash1.83%
Total interest 10yr$5,385,707
Insured · 85% LTV · 1.20x DCR
MLI Standard
Max loan
$13,224,322
LTV 63.98% · cap 85%
Rate5.25%
Amortization40 yrs
Min DCR1.20x
Premium$428,655 (3.35%)
Equity required$7,204,332
Annual debt service$791,667
DCR achieved1.20x
Cash flow Y1$158,333
Cash-on-cash2.20%
Total interest 10yr$6,639,425
Insured · 95% LTV · 1.10x DCR · 30% discount
MLI Select (100)
Max loan
$15,251,724
LTV 73.88% · cap 95%
Rate5.25%
Amortization50 yrs
Min DCR1.10x
Premium$475,785 (3.22%)
Equity required$5,224,061
Annual debt service$863,636
DCR achieved1.10x
Cash flow Y1$86,364
Cash-on-cash1.65%
Total interest 10yr$7,811,173
Capital recaptured
$5,175,170
Select vs. conventional equity requirement.
Premium paid (Select)
$475,785
Capitalized into the loan.
Premium break-even
n/a
Years for cash-flow uplift to recover Select premium.
Callout · Premium mechanics
Premium is capitalized into the CMHC loan — it's not paid in cash. You pay it through debt service over the amortization.
PST on the premium (ON 8%, QC 9.975%, SK 6%, MB 7%) is cash at closing and NOT financeable. Budget alongside legal & appraisal.