Increase in CMHC Mortgage Loan Insurance Premiums — Key Facts
Mortgage loan insurance helps protect lenders against mortgage default and enables consumers to purchase homes with a minimum down payment of 5% with interest rates comparable to those with a 20% down payment. Mortgage loan insurance is typically required by lenders when homebuyers make a down payment of less than 20% of the purchase price.
Effective June 1, 2015, the mortgage loan insurance premiums for homebuyers with less than a 10% down-payment will increase by approximately 15%. The increase applies to mortgage loan insurance premiums for residential housing of 1 and 2 units for homebuyers with less than a 10% down payment.
For the average Canadian homebuyer 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 housing markets.
This information may help get some of your buyers off the fence and ready to put pen to paper!!!! Remember I am now offering 6 month hold at 2.69% for a five year!
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