9 Apr

Increase In CMHC Insurance Premiums

General

Posted by: Bonnie Hudson

Canada Mortgage and Housing Corporation and Genworth will be increasing the insurance premiums on High Ratio Mortgages (80.1%-95% loan to value) effective May lst, 2014.  The following changes will apply:

Loan to Value                   Current Standard Premium             Standard Premium Effective May 1st

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%

Flexdown                               2.90%                                                     3.35%

 

Mortgage loan insurance helps protect the lenders against mortgage default and enables consumers to purchase homes with a minimum down payment of 5%.  Mortgage loan insurance is typically required by lenders when homebuyers make a down payment of less thatn 20% of the purchase price.  The premium can be paid as a lump sum but more frequently is added to the mortgage principal and amortized over the life of the mortgage as part of regular mortgage payments.