Effective May 01, 2014, CMHC has announced an increase to their mortgage insurance premiums across the board. The premium increase ranges from 0.05% to 0.40% depending on the loan-to-value ratio. As a reminder, mortgage loan insurance is a requirement by lenders when your down payment is less than 20% of the purchase price. CMHC advises that in 2013 the average insured mortgage at 95% loan-to-value was $248,000. With the new CMHC guidelines, this will translate to less than a $5.00 increase in your monthly mortgage payment for a $250,000 mortgage. Here are some other examples:
| Loan Amount | $200,000 | $300,000 | $400,000 |
| Current Premium | $5,500 | $8,250 | $11,000 |
| New Premium | $6,300 | $9,450 | $12,600 |
| Additional Premium | $800 | $1,200 | $1,600 |
| Increase to Monthly Mortgage Payment | $3.87 | $5.80 | $7.73 |
* The above scenarios are based on a 5 year term @ 3.19% and a 25 year amortization.
If you are purchasing a home soon and would like to find out how the new insured guidelines will affect you, please give one of our professional Kelowna mortgage brokers at The Mortgage Centre – BC Direct Mortgages a call at 250-762-2070 at your convenience to discuss further. We look forward hearing from you soon.
