CMHC to raise mortgage insurance premiums
It would add about $5 to a monthly mortgage payment
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OTTAWA — Canada Mortgage and Housing Corp. is raising the cost of mortgage loan insurance effective March 17.
The Crown corporation estimates the increases will add about $5 to a monthly mortgage payment for its average homebuyer.
CMHC says the changes reflect new regulatory requirements that came into effect on Jan. 1 that require mortgage insurers to hold additional capital.
The premiums are calculated based on the loan-to-value ratio of the mortgage being insured.
The size of the increase in rates depends on that ratio.
Lenders typically require mortgage loan insurance when a homebuyer makes a down payment of less than 20 per cent.
The cost can be paid in a single lump sum, but CMHC says the amount is often added to the mortgage principal and repaid over the life of the loan.
Read more:
- Regulators should explore boosting minimum down payment: CMHC
- Mortgage insurance changes will impact buyers
- Can I get mortgage insurance if I’m on long-term disability?
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