Mortgage Insurance To Get Costlier As CMHC Hikes Rates + MORE Jan 17th

OTTAWA — Canada Mortgage and Housing Corp. is raising the cost of mortgage loan insurance effective March 17.

The Crown corporation estimates the increases will add about $5 to a monthly mortgage payment for its average homebuyer.

CMHC says the changes reflect new regulatory requirements that came into effect on Jan. 1 that require mortgage insurers to hold additional capital.

The CMHC logo is seen on a Quebec City office, September 15, 2010. (Photo: Canadian Press Images/Francis Vachon)

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.

Lenders typically require mortgage loan insurance when a homebuyer 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. — This feed and its contents are the property of The Huffington Post, and use is subject to our terms…

The Canada Mortgage and Housing Corporation will charge borrowers a few dollars more monthly to insure their mortgages, starting in March.

Homebuyers with less than 20% down are going to pay more. CMHC is hiking mortgage insurance rates for the third time in three years. Premiums are jumping up to 0.65 percentage points on the highest LTV mortgages, effective March 17, 2017. Here’s the new premium table: But high-ratio hikes aren’t the only story. Premiums on mortgages between 65.01 and 80% LTV are soaring too. At 80% LTV, the premium is almost doubling to 2.40%. That will push up interest rates among lenders who currently pay this premium for their customers in order to securitize the mortgage. CMHC had a conference call READ MORE

OTTAWA — Canada Mortgage and Housing Corp. is raising the cost of mortgage loan insurance effective March 17.
The Crown corporation estimates the increases will add about $5 to a monthly mortgage payment for its average homebuyer.
CMHC says the changes reflect new 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.
Lenders typically require mortgage loan insurance when a homebuyer 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.

Read more:

Regulators should explore boosting minimum down payment: CMHC
Mortgage insurance changes will impact buyers
Can I get mortgage insurance if I’m on long-term disability?

 
The post CMHC to raise mortgage insurance premiums appeared first on MoneySense.

Earlier today, the Canada Mortgage and Housing Corporation—the crown corporation responsible for housing in Canada—announced it’s raising mortgage loan insurance premiums as of March 17, 2017.

This new increase in CMHC fees “will result in an increase of about $5 a month for the average homebuyer,” as explained in the CMHC press statement.

Steven Mennill, senior vice-president of insurance at CMHC, also said, in the news release that the corporation “doesn’t expect the higher premiums to have a significant impact on the ability of Canadians to buy a home. Overall, the changes will preserve competition in the mortgage loan insurance industry and contribute to financial stability.”

Ratehub.ca co-founder and President of Canwise Financial, James Laird, added: “Relative to the rule changes that were implemented in late 2016 this is not a major change. Premiums will be increased for all of those Canadians with less than 20% down, but these premiums are added on to the mortgage and paid off over the life of the mortgage, so the cash required on closing does not change…