CMHC raising mortgage insurance premiums for new buyers

Posted by Steve Harmer on Monday, January 30th, 2017 at 9:27am.

CMHC mortgage insuranceOTTAWA, ON. – The Canada Mortgage and Housing Corporation is raising the cost of mortgage loan insurance for new home buyers effective March 17th. The Crown Corporation estimates the increases will add about $5 to a monthly mortgage payment for its average home buyer.

TO READ THE FULL NEWS RELEASE CLICK HERE

Regulatory requirements that came into effect on Jan. 1 that require mortgage insurers to hold additional capital. The premiums are calculated based on the loan-to-value ratio of the mortgage being insured. The size of the increase in rates depends on that ratio.

For instance, new homeowners who make a down payment between five to 9.99 per cent can expect an increase of $6.59 to their monthly mortgage if their loan is $350,000.

Why choose a RealtorFor the same loan amount, those with a 10 to 14.99 per cent down payment face an increase of $11.52 a month, while those with a down payment between 15 to 19.99 per cent will pay $16.46 more a month. The corporation says the average CMHC-insured loan was approximately $245,000.

Lenders typically require mortgage loan insurance when a home buyer makes a down payment of less than 20 per cent. The cost can be paid in a single lump sum, but CMHC says the amount is often added to the mortgage principal and repaid over the life of the loan.

Register with Danielle to receive real estate updates


 

© http://www.news1130.com/2017/01/17/cmhc-raising-mortgage-insurance-premiums-new-buyers/

Leave a Comment