LTV Calculator Canada 2026

Calculate your loan-to-value ratio, equity position, and CMHC insurance thresholds for Canadian mortgages.

Key Takeaways

  • LTV below 80% means no mortgage insurance required — saving thousands in premiums.
  • Minimum down payment is 5% up to $500,000, then 10% on the portion above $500,000 (up to $1,499,999).
  • Properties at $1,500,000+ require a minimum 20% down payment and cannot be insured.
  • Your LTV improves over time through mortgage payments and property appreciation.

Loan-to-Value (LTV) Ratio and CMHC Insurance in Canada

The loan-to-value (LTV) ratio is one of the most important numbers in Canadian real estate financing. It represents the percentage of a property's value that is financed by the mortgage — the higher the LTV, the less equity you have and the more risk the lender assumes. In Canada, the LTV ratio directly determines whether you need mortgage default insurance and how much that insurance will cost.

Canadian regulations require mortgage default insurance (commonly called CMHC insurance, though Sagen and Canada Guaranty also provide it) on any mortgage where the down payment is less than 20% of the purchase price. Understanding your LTV ratio helps you plan your down payment, estimate your total borrowing costs, and determine whether it makes sense to put down more to avoid insurance premiums.

How It Works

This calculator determines your LTV ratio by dividing your mortgage amount by the property value, then identifies whether CMHC mortgage default insurance is required and calculates the insurance premium. It also shows how your LTV changes if you adjust your down payment amount.

Enter the property purchase price and your planned down payment. The calculator computes your LTV ratio, applies the appropriate CMHC insurance premium tier (if applicable), and shows the total mortgage amount including the insurance premium (which is typically added to the mortgage balance). For properties over $500,000, the minimum down payment is calculated using Canada's tiered system: 5% on the first $500,000 and 10% on the portion above $500,000.

How LTV Affects Your Mortgage Costs

Your loan-to-value ratio directly determines three key costs: whether you need CMHC insurance (above 80% LTV), the insurance premium rate (higher LTV = higher premium), and potentially your interest rate. At 95% LTV, the insurance premium alone is 4.00% of the mortgage — on a $475,000 mortgage, that's $19,000 added to your balance.

Reducing your LTV from 95% to 90% (increasing your down payment from 5% to 10%) drops the premium from 4.00% to 3.10%, saving you approximately $4,275 in premiums. The additional $25,000 in down payment effectively earns a guaranteed return by avoiding this cost — plus you save interest on the lower mortgage balance over the full amortization.

Canada's Tiered Down Payment Rules

Canada uses a tiered minimum down payment system. For purchase prices up to $500,000, the minimum is 5%. For the portion between $500,000 and $1,499,999, the minimum is 10%. For properties at $1,500,000 or above, the minimum is 20% (no insurance available).

For example, on a $750,000 home: 5% on the first $500,000 ($25,000) + 10% on the remaining $250,000 ($25,000) = $50,000 minimum down payment (6.67% of purchase price). Understanding this tiered system is important for planning how much you need to save before entering the market.

Key Facts

  • In Canada, a down payment of less than 20% requires mortgage default insurance. The minimum down payment is 5% for homes up to $500,000, with 10% required on the portion between $500,000 and $1,499,999.
  • Properties priced at $1,500,000 or more require a minimum 20% down payment and are not eligible for mortgage default insurance.
  • CMHC insurance premiums range from 2.80% (15.00%-19.99% down) to 4.00% (5.00%-9.99% down) of the mortgage amount. The premium is typically added to your mortgage balance.
  • An LTV of 80% or lower means no insurance is required, which also qualifies you for more competitive interest rates from many lenders.
  • When refinancing, the maximum LTV allowed in Canada is 80% — you cannot refinance with less than 20% equity.
  • Your LTV improves over time as you pay down your mortgage principal and as your property value appreciates, which can open up better refinancing options.

FAQ

What is a good LTV ratio in Canada?

An LTV of 80% or lower is generally considered good because it means you have at least 20% equity and don't need mortgage default insurance. This saves you thousands of dollars in insurance premiums and often qualifies you for better interest rates. An LTV of 65% or lower is considered excellent and gives you the most flexibility for refinancing and accessing home equity lines of credit (HELOCs). However, many first-time buyers start with a higher LTV (up to 95%) and build equity over time.

How is the CMHC insurance premium calculated?

The CMHC premium is a percentage of the mortgage amount (not the property price) and varies by LTV tier. For an LTV of 90.01%-95.00% (down payment of 5%-9.99%), the premium is 4.00%. For 85.01%-90.00% (10%-14.99% down), it's 3.10%. For 80.01%-85.00% (15%-19.99% down), it's 2.80%. The premium is a one-time charge typically added to your mortgage balance and amortized over the life of the mortgage. On a $500,000 home with 5% down, the insurance premium would be $19,000 (4.00% of $475,000).

Does my LTV affect my mortgage rate?

Yes, but perhaps not in the way you'd expect. Insured mortgages (LTV above 80%) sometimes carry slightly lower interest rates than uninsured mortgages because the lender's risk is covered by the insurer. However, the total cost is higher once you factor in the insurance premium. Conventional mortgages (LTV of 80% or below) may have a marginally higher rate but no insurance premium. At very low LTV ratios (below 65%), some lenders offer their best rates because the risk is minimal.

How do I calculate LTV on a property I already own?

To calculate your current LTV, divide your remaining mortgage balance by your property's current market value. For example, if you owe $350,000 on a home now worth $600,000, your LTV is 58.3%. You can estimate your property's current value using recent comparable sales in your neighbourhood or by getting a professional appraisal. Your lender will require a formal appraisal if you're applying to refinance or set up a HELOC. Monitoring your LTV over time helps you understand when you might qualify for better financing options.

Updated March 2026. Information on this page is provided for educational purposes only. Tax rules, rates, and government programs may change — verify details with the CRA or a qualified financial advisor.