CMHC announced changes to the insurance premiums paid by borrowers on high ratio loans and we wanted to share an update to keep you all informed.
Excerpted from the CMHC press release, any emphasis is ours:
CMHC to Increase Mortgage Insurance Premiums
“OTTAWA, February 28, 2014 — Following the annual review of its insurance products and capital requirements, CMHC will increase its mortgage loan insurance premiums for homeowner and 1 – 4 unit rental properties effective May 1, 2014.
The increase applies to mortgage loan insurance premiums for owner occupied, self-employed and 1-to-4 unit rental properties, including low-ratio refinance premiums. This does not apply to mortgages currently insured by CMHC.”
“For the average Canadian homebuyer requiring CMHC insured financing, the higher premium will result in an increase of approximately $5 to their monthly mortgage payment. This is not expected to have a material impact on the housing market.
Effective May 1st, CMHC Purchase (owner occupied 1 – 4 unit) mortgage insurance premiums will increase by approximately 15%, on average, for all loan-to-value ranges.
Loan-to-Value Ratio Standard Premium (Current) Standard Premium (Effective May 1st, 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%
- 90.01% to 95% – Non-Traditional Down Payment 2.90% 3.35%
CMHC reviews its premiums on an annual basis and, going forward, plans to announce decisions on premiums in the first quarter of each year. The homeowner premium increase follows changes CMHC made to its portfolio insurance product earlier this year.”
See the complete new release here.
Please call us today for a complimentary pre-approval including a rate hold at today’s best rates, and a mortgage commitment using CMHC’s current premiums.
Tawny Bley and Tyler Hildebrand
Sky Financial Corporation