CMHC insurance premiums are increasing effective May 1, 2014

For almost every purchase in Canada where clients are putting down less than 20% down payment, your mortgage is insured against default by on of the mortgage insurers in Canada, either CMHC, Genworth, or Canada Guaranty.  Effective May 1, the insurers in Canada are increasing their insurance premiums by about 15% for all premiums.

A couple of items to realize, this is only effective for borrowers who are approved for their mortgage after May 1, if you are already approved prior to the change date and your possession is after, you will still receive the benefit of the lower insurance premium.  From a big picture view, this is not a big deal for most borrowers in terms of mortgage qualification or payments.  For an average $300 000 mortgage amount with 5% down payment the CMHC insurance premium added to your mortgage increases by about $1200 in total.  This results in an overall payment increase of $5 per month or a total of $300 over an entire five year term.  Bottom line, do we like paying more? absolutely not, is it going to be the difference between purchasing your new home or not? it definitely should not.  For any questions about CMHC or any other Canadian mortgage questions or approvals please feel free to contact me directly.

Rylan Hahn 403-802-7201, CMHC insurance.