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.