CMHC increase is unfair, say investors

by |
The new CMHC premium hike for default insurance – coming into effect this Thursday, May 1 – is unfair to those who want to make a profitable business, argues one investor.

The controversial mortgage insurance hikes will hurt investor bottom lines and could potentially put a dent in some portfolio plans.

Speaking to's sister publication CREW, investor Sahil Jaggi says mortgage insurance companies should not be “lumping” all property owners in the one group.

“It is a little added cost that I feel, as an investor, is obviously a little pinching,” he says. “If the government can see if a person has more than 50 per cent in most of his properties, and has decent income, certainly the CMHC rate should be a little more lenient for those investors as opposed to people who have a bad record.”

The Canada Mortgage and Housing Corporation (CMHC) announced in February that it would increase its mortgage loan insurance premiums for investors who hold between one and four rental units.

The hike, averaging at 15 per cent for all loan-to-value ranges, also applies to owner occupied and self-employed homeowners. Genworth also announced its rate hike at the same time.

Jaggi says that the premiums should be implemented on a case-by-case basis. “If they do it this way, they will be able to encourage investors who are maintaining their portfolios at a very safe and cautious way already.”

  • A Broker on 2014-04-29 11:33:07 AM

    Your an investor? If you can't work your way through a simple thing like that should you be in the business and are you truly an investor or just someone who wants to put their money into real estate with government backing.

  • Tim Brierley on 2014-04-29 1:36:56 PM

    Seems to me the premiums used to be higher than they are even now before the government dropped them a few years ago. If you don't like the premium, put more money down. CMHC does not and should not have a sliding scale with which to apply a premium on a case by case basis. Either you are qualified or you are not. If you have a 'bad record' you should not qualify for a CMHC mortgage, regardless of the premium. Not sure who this 'investor' is, but his comments are disingenuous and of questionable value in a legitimate article about mortgage changes.

Broker news forum is the place for positive industry interaction and welcomes your professional and informed opinion.

Name (required)
Comment (required)
By submitting, I agree to the Terms & Conditions