Once again, we’ll be seeing a hike in mortgage insurance premiums, thanks to the Canadian Mortgage and Housing Corp. They have announced that effective March 17 premiums will amount to around an additional $5 per month on insured mortgages.
So who will this have the biggest impact on? Because federal rules require lenders to take out mortgage insurance for loans that have a down payment of less than 20 per cent, this will have a more significant impact on home buyers with bigger down payments.
To put it in perspective:
- a home buyer putting a 5% down payment on a $150,000 mortgage will pay an average of an extra $2.82 a month
- a home buyer with a 15% down payment on an $850,000 mortgage will pay an average of an extra $40 each month
Are these rate increases outrageous? Not really. But when you couple this premium increase with high home prices and stress test requirements that came into play late last year, it’s becoming quite the uphill battle for first time homeowners and others looking to get into the market at a higher price point.
To avoid this addition hike to your premium, contact our sales teams before March 17.