CMHC Increases Mortgage Insurance Rates

CMHC Logo

Just in time for Easter CMHC (Canadian Mortgage and Housing Corp.) has laid a bit of an egg and tried their very best to hide it with the paint of the long Easter weekend.

CMHC has said it is raising premiums on high ratio mortgages (borrowers who have down payments of less than 10 per cent)  by 15 per cent from 3.15% to 3.60% starting June 1.

CMHC is reportedly concerned about the future housing for buyers with a downpayment of less than 10% and is justifying its move by showing payments increasing $5 per month. Quote from the CMHC press release:

In 2014, the average CMHC insured loan at 95% loan-to-value was $252,530. Based on this figure, the higher premium will result in an increase of approximately $5 to the monthly mortgage payment for the average Canadian homebuyer. This is not expected to have a material impact on housing markets.
— http://www.cmhc.ca/en/corp/nero/nere/2015/2015-04-02-1605.cfm?WT.cg_n=TWT_MLI

In summary this likely won't stop most buyers from being able to purchase, however if you're in the market for a home with less than 10% and can purchase, you should consider buying before June 1st to save on the premiums.

For the entire press release click this link.