If you’re buying a home with a down payment of less than 20%, you already know that you need to purchase mortgage default insurance, also called CMHC insurance. In Manitoba, Ontario, and Quebec, you must also pay provincial sales tax (PST) on the default insurance premium—7%, 8%, and 9.975% respectively.
If your CMHC premium amounts to $5,400, the amount of PST you would have to pay on that in Ontario (8% PST) would be:
$5,400 x 8% = $432 PST
It’s important to note that PST on default insurance cannot be added to your mortgage loan – you will have to pay the PST with cash at closing.
To calculate your mortgage default insurance amount, as well as your PST on your insurance premium, use our CMHC Insurance Calculator.