CMHC is increasing the insurance rates for mortgage loans by 15 per cent on average.
The new premiums will go into effect May 1 and apply to all new mortgages, existing mortgages are not affected.
Buyers with less than 20% down payment will be paying more in insurance premiums. Self-Employed clients with no income verification will pay even higher premiums.
The overall cost of buying a home with a small down payment could cost thousands, but CMHC estimates on an average purchase the cost will work out to $5 per month to an average mortgage payments.
Interesting Points:
- Existing insured mortgages are not affected as long as no new money is added.
- Changes apply to owner occupied, self-employed and 1-to-4 unit rental property applications
- Self-Employed applicants who cannot verify income will be hit with the largest increase
- All the mortgages approved before May 1st will still get current rates.
- Genworth has announced that they will follow CMHC with the increase, Canada Guarantee has not made an announcement yet
| Loan-to-Value Ratio | Standard Premium (Current) |
Standard Premium (Effective May 1, 2014) |
||||
| Up to and including 65% | 0.50% | 0.60% | ||||
| Up to and including 75% | 0.65% | 0.75% | ||||
| Up to and including 80% | 1.00% | 1.25% | ||||
| Up to and including 85% | 1.75% | 1.80% | ||||
| Up to and including 90% | 2.00% | 2.40% | ||||
| Up to and including 95% | 2.75% | 3.15% | ||||
Past CMHC insurance premium changes:
- In 2006 CMHC added the homeowner premium surcharge for extended amortizations beyond 25 years.
- In 2006 CMHC eliminated the application fee for all high-ratio homeowner applications.
- In 2005 CMHC reduced its homeowner premiums in the 90.01% to 95% loan-to-value range by 15% and its multi-unit affordable housing premiums by 15%.
- In 2003 CMHC reduced its homeowner premiums by 15% on all loan-to-value ranges.
- In 2002 CMHC increased its mortgage loan insurance premiums for new multi-unit residential properties (5 units or more).
(Source: CMHC)
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