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CMHC Increases Mortgage Insurance Premiums March 2017

on 27 January 2017
CMHC Raises Insurance Premiums for mortgages in Canada

Insurance Premium Increase Effective March 2017 – Secure Your Best Mortgage Rates Today

The Canadian Housing and Mortgage Cooperation has announced that it will be increasing insurance premiums as of March 17, 2017.

With recent announcements of an insurance premium increase it may be more important now than ever to secure your best mortgage rates in Vancouver today. 

A typical insured mortgage will only have a “minor” increase, approximately an additional $5 per month. Dissimilar to previous increases which have commonly effected buyers in the high ratio category, these changes will have more of an impact on buyers with larger down payments.

Whether you are considered a high or low ratio borrower it’s important to secure your best mortgages rates today while rates are still at all-time lows.

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Example 1:
Buyers with a down payment of 15% will have a rise by 100 basis points (1/100 of a percentage point). Buyers with a 5% down payment will see premiums increase by 40 basis points.

Example 2:
For a buyer with 15% down payment on an $850,000 mortgage will pay an average increase of $40 a month. Whereas buyers with a 5% down payment on $150,000 mortgage will pay an average increase of $2.82 a month.

These soon to be implemented increases are intended to protect lenders in the event that a borrower defaults on the mortgage. Lenders are required to take out mortgage insurance on any loan where the borrower has less than 20% down payment.

For more information on the increase of insurance premiums please click here for full article.

*High Ratio Mortgage: A high ratio mortgage is when a borrower has less than 20% down payment of the purchase price.
*Low Ratio Mortgage: A low ratio mortgage is when a borrower has 20% or more down payment of the purchase price.