The Canadian Mortgage Housing Council, Canada’s largest insurer of mortgages, recently announced that starting June 1, mortgage insurance premiums will increase for homebuyers putting a down payment of less than 10 per cent; the premium will increase by 15 per cent. According to the CMHC, for a $250,000 mortgage, homebuyers who put less than a 10 per cent down payment translates to an increase of about $5.20 a month to the mortgage payment.
There will be no change for homebuyers who put a down payment of 10 per cent or greater and for homes currently insured by CMHC.
Steven Mennill, the CMHC's senior vice-president of insurance, explained the increase in premium was the result of the organization conducting "a detailed review of its mortgage loan insurance premiums" and a revision of "the performance of the various sub-segments of its portfolio." The CMHC determined an increase was necessary because their target capital requirements were raised last year.
For more information on the CMHC and the impending changes, contact a Century 21 Kings Quay representative today.