The much anticipated CMHC announcement turned out to be a blip on the radar for most of us. As a REALTOR® in Lethbridge, I was just relieved that they didn’t increase the minimum down payment for first-time homebuyers.
Canada Mortgage and Housing Corp. is raising its mortgage loan insurance premiums effective May 1, the Crown corporation announced Friday.
The increases will be for new policies, not those that are already insured. Premiums will rise by about 15 per cent on average, CMHC said.
“The higher premiums reflect CMHC’s higher capital targets,” vice president Steven Mennill stated in a press release. “For the average Canadian home buyer 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.”
The Globe and Mail, February 28, 2014
Given this is the first premium increase since 1998, Canadians shouldn’t be surprised. If you are not able to come up with a 20% down payment on your next home, head over to my Mortgage Calculator for an estimate on the cost of mortgage insurance.
Did You Know? …Depending on lender-specific criteria, some banks will tack CMHC onto the home buyer’s mortgage, even WITH a 20%+ down payment. Speak to a reputable mortgage broker about how to minimize your cost of borrowing, before you write an offer!