Mortgage insurance premiums hiked once again

by REP17 Jan 2017
CMHC announced early Tuesday it is increasing its loan insurance premiums effective March 17.

“We do not expect the higher premiums to have a significant impact on the ability of Canadians to buy a home,” said Steven Mennill, Senior Vice-President, Insurance. “Overall, the changes will preserve competition in the mortgage loan insurance industry and contribute to financial stability.”

According to the Crown Corporation, the average homebuyer will see a $5 increase to their monthly mortgage payment as a result. That $5 certainly adds up, however, to a total of $1,500 over the course of a 25 year mortgage.

The increase is the result of last year’s mortgage rule changes, CMHC claims.

“Capital requirements are an important factor in determining mortgage insurance premiums. The changes reflect OSFI's new capital requirements that came into effect on January 1st of this year that require mortgage insurers to hold additional capital,” it said in a release.

“Capital holdings create a buffer against potential losses, helping to ensure the long term stability of the financial system.”




This latest hike comes less than two years after the most previous one, which was announced in April 2015.

See below for standard premium changes.


 

COMMENTS

  • by R Carrol 1/17/2017 10:25:42 AM

    Does any one know how many billions of dollars CMHC has sitting in the bank between government cash grab land transfer taxes HST CMHC fees I'm surprised any young family starting out ever can buy a house really government what do you do with tax payers money besides lie and do studies

  • by R Carrol 1/17/2017 10:44:15 AM

    They call it insurance with the only benifit is to the bank lending the money no protectection to the consumer god help you if you lose you job and can't make payments where is the insurance you make the payments for the bank they lend the money really at no risk to a high ratio mortgage the people that can least afford it are punished with high fees and long term debt added to mortgage because 99% can't afford to pay the CMHC fees up front why is government discouraging home ownership and sense of pride of community they say you can get a tax credit for first time home buyers a portion of land transfer and take it away with CMHC fees are system is broken needs to be fixed

  • by Laura 1/17/2017 10:53:04 AM

    You are right on the money !

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