CMHC fee increases could add hundreds of dollars to mortgage cost

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CMHC is to triple the charges it makes to some financial institutions. The fee increases will be for guaranteeing loans in the mortgage-backed securities market, which the agency operates under the National Housing Act. Some experts are predicting that the hike in fees will filter down to homebuyers with the likelihood of a few hundred dollars being added to the cost of a mortgage. The fee for mortgages with a five-year maturity will rise from 0.2 per cent to 0.6 per cent. The move could however benefit smaller lenders as for annual mortgage guarantees below $6 billion the new rate will be 0.3 per cent. 
  • Barb on 2014-12-15 8:03:49 AM

    The article doesn't mention the reason for the increase. Why is the increase only for some Financial Institutions? Have they seen an increase in delinquency in MBS loans?

  • Gary on 2014-12-15 9:34:01 AM

    It appears that CMHC has forgotten the reason that the agency was originally formed--to help provide Canadians with affordable housing. Common sense tells you that the additional costs will be passed onto the borrower. And this as well as the other restrictive changes all stem from a few years ago when Flaherty was afraid to walk up the hill and get the agency's limit increased beyond the $600 Billion that was established so many decades ago.

  • Mortgage Delivery Guy on 2014-12-15 9:36:33 AM

    Doesn't look much but over all every expense adds up for a first time home buyer.

  • Diane on 2014-12-15 10:13:38 AM

    I Agree with Gary!

  • Daryl French on 2014-12-15 11:46:24 AM

    This could be a win for the broker channel as small monolines will benefit from lower costs allowing them to better compete with the big players. More competition in the market is good and usually keeps pricing competitive??

  • Ron Butler on 2014-12-15 12:02:17 PM

    Actually Daryl, it is likely just the opposite. Check out Rob McLister's article in CMT. Based on the info in that article the winners may be 1st Nat, MCAP and the big monolines. The Big 6 banks always find a way to win so no worries for them.

  • History Repeats on 2014-12-15 12:47:05 PM

    Well done Canada! Highest investment fees; higher income tax than most if not all other countries; higher fees for those who need the help to purchase a home - which by the way only helps our economy, when more Canadians can afford to purchase their own home. But what the hey...let's go ahead and stick it to them, but just a 'little'. Because, I will agree with Gary.....the lenders will 'need' to compensate for the increase in cost somehow...and that would be to its clients - the consumer. Well done! So to Canadian consumers I ask....just how much are you willing to take, or should I say give? are you going to continue to roll out the red carpet every time some so called "helping Canadians" agency or organization wants to charge you more and more and more? But of course you are! it's in your nature. You don't like it, but you'll go along with it. Oh dear victims of circumstance. That's why it keeps happening. Well done....your complacency is their command! Just keep piling on those fees Canadians, you will gladly pay! eh.

  • Steve on 2014-12-15 2:18:14 PM

    If the fee makes my life easier, then I am all for it. but if its the same service, then it seems only a weight to add to the 1st time home buyer experience. I agree with the idea that lenders get penalized based on their foreclosure rate. Motivate some of these banks to actually help a person in trouble instead of "hiring a lawyer" to handle the customer service of a foreclosure file. Banks don't seem to have any motivation to support Canadians in trouble... sometimes lifelong clients, through medical issues, job change, family break up etc.

  • Alphonse Negro on 2014-12-15 8:32:26 PM

    Canadians are suffocating with all the fees..In the Province of Quebec the Liberal party has taken draconian measures to get the budget in line. City taxes are getting another increase, Hydro is getting another increase and our gaz prices are the most expensive in Canada plus a beer at a Canadians hockey game at the Bell Centre is the most expensive in North America.. The cost of living is on its way way up and reduced gaz prices although good for the consumer may be bad for the economy and may just hinder economic expansion..........

  • M. Robertson on 2014-12-16 1:17:53 PM

    It never ceases to amaze me at the way people n this country complain about fees and taxes. We live in a country with one of the highest standards of living in the world - the ONLY countries that have higher... have HIGHER tax rates than we do. You get what you pay for people.

    Canadians expect so much, and they complain more than anyone else on this planet about what they don't have. Time for a reality check to all of you gainfully employed people who are whining about fees.

    There are people in this country that have nothing. No home, no food, no nothing. There are people in this world who have nothing.

    You live in a country that is literally the 2nd largest in the world... with a whopping 36 million or so people. We want all the infrastructure, and yet when it come to paying for it... nope. Did you know that in Canada we have more square feet of land per person than any other country on the planet? That means it costs more to provide service.

    You all live in homes that are almost double the world average in size. We have 2.1 cars per household, and we travel abroad per capita more than almost every other country.

    #firstworld problems people. Time to get a reality check. Go and spend some time actually working in a third world country where people make $30 a month and their housing costs $15-$20 a month. If they are lucky enough to have housing, never mind health care, electricity, running water, etc etc etc.

    People need to get a grip on reality and understand just how truly lucky we are in this country.

  • Ron Butler on 2014-12-16 1:35:27 PM

    I am not discounting the concept of being grateful we live here but one of the main reasons we have the society we live in is that we question everything and we constantly strive for better results. The question of over taxation and government waste is an important subject not to be shrugged off. First World problems for sure but the way we will stay in the First World is to sweat the details of how we operate our government and society.

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