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Sean Donohue Mortgage Broker

Sean Donohue

Mortgage Broker


Address:
775 Blackburn Mews West, Kingston, Ontario

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CMHC to Increase Mortgage Insurance Premiums on March 17

3/8/2017

CMHC (Canada Mortgage and Housing Corporation) will increase its homeowner mortgage loan insurance premiums effective March 17, 2017.
 
Premiums are calculated based on the loan-to-value ratio of the mortgage being insured. Lenders typically require mortgage loan insurance when a homebuyer makes a down payment of less than 20 %.
 
The premium can be paid in a single lump sum but more frequently is added to the mortgage principal and repaid over the life of the mortgage as part of regular mortgage payments.
 
For the average CMHC-insured homebuyer, the higher premium will result in an increase of approximately $5 to their monthly mortgage payment.
 
For example, if your property was $266,500.00 and you have a downpayment of 5% or $13,325.00, you would have a mortgage of approximately $253,175.00 and need mortgage insurance.
 
Prior to the increase, your cost for Mortgage Insurance from CMHC would be 3.60% of $253,175.00 or $9114.30.
 
After March 17, your cost for Mortgage Insurance from CMHC would be 4.00% of $253,175.00 or $10,127.00.
 
However – this $1013.00 increase is spread out over the life of your mortgage, typically for 25 years.  Your increase on a monthly basis will be about $5.10.

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