CMHC to Increase Mortgage Premiums May 1st 2014

The Canadian Mortgage and Housing Corporation (CMHC) recently announced that on May 1st 2014, they would be increasing insurance premiums for conventional ratio insured and high ratio mortgages (mortgages with less than a 20% downpayment).

Home buyers most affected by this will be those looking to purchase property with a 5% downpayment.

They will see an increase from a 2.75% premium to a 3.15% premium. To put this into perspective... At todays rates, on a mortgage amount of $300k with a 5% downpayment, the monthly increase in CMHC premium equals the cost of a cup of coffee and bagel.

So... is this really a big deal? Well, obviously no one is excited about paying more in insurance premiums, however as the alternative is coming up with a 20% downpayment, CMHC continues to make home ownership in Canada more accessible for the average Canadian.

At First Foundation we stay very current on the changes in the Canadian mortgage and housing market, feel free to contact us anytime if you want to discuss something you have heard in the news!