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CMHC Increases Mortgage Loan Insurance Premiums

By March 6, 2014Mortgage News

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.