Mortgage insurance premiums hiked once again

Mortgage insurance premiums hiked once again

Mortgage insurance premiums hiked once again CMHC announced early Tuesday it is increasing its loan insurance premiums effective March 17.

“We do not expect the higher premiums to have a significant impact on the ability of Canadians to buy a home,” said Steven Mennill, Senior Vice-President, Insurance. “Overall, the changes will preserve competition in the mortgage loan insurance industry and contribute to financial stability.”

According to the Crown Corporation, the average homebuyer will see a $5 increase to their monthly mortgage payment as a result. That $5 certainly adds up, however, to a total of $1,500 over the course of a 25 year mortgage.

The increase is the result of last year’s mortgage rule changes, CMHC claims.

“Capital requirements are an important factor in determining mortgage insurance premiums. The changes reflect OSFI's new capital requirements that came into effect on January 1st of this year that require mortgage insurers to hold additional capital,” it said in a release.

“Capital holdings create a buffer against potential losses, helping to ensure the long term stability of the financial system.”




This latest hike comes less than two years after the most previous one, which was announced in April 2015.

See below for standard premium changes.



 
10 Comments
  • Omer Quenneville 2017-01-17 9:43:02 AM
    I like how they do that, they hide the increase behind $5.00 per month instead of stating it would add $1000+ to cost the average home. Mortgage Brokers News is no better, it didn't to catch it and report it. I guess that makes MBN repeaters and not reporters. I'm disappointed.
    Post a reply
  • Jake Abramowicz 2017-01-17 10:01:13 AM
    Here's an idea. How about in your news item you actually show us the increase?

    It's 4% by the way, up from 3.6%.
    Post a reply
  • Tony Piattelli 2017-01-17 10:50:00 AM
    This is nothing more than another money grab. Can anybody tell me when the last time CMHC lost money if ever? If they've never lost money then why the need to increase premiums? The rationale that they are using is nothing short of bs. Oh yea, to support the increased capital required due to unnecessary rule changes that our current liberal government put in place which will do nothing outside of increase costs to consumers again.
    Post a reply