CMHC to Increase Mortgage Insurance Premiums
Wednesday, March 5th, 2014
OTTAWA, February 28, 2014 — Following the annual review of its insurance products and capital requirements, CMHC will increase its mortgage loan insurance premiums for homeowner and 1 – 4 unit rental properties effective May 1, 2014.
The increase applies to mortgage loan insurance premiums for owner occupied, self-employed and 1-to-4 unit rental properties, including low-ratio refinance premiums. This does not apply to mortgages currently insured by CMHC.
For the average Canadian homebuyer requiring CMHC insured financing, the higher premium will result in an increase of approximately $5 to their monthly mortgage payment. This is not expected to have a material impact on the housing market.
Effective May 1st, CMHC Purchase (owner occupied 1 – 4 unit) mortgage insurance premiums will increase by approximately 15%, on average, for all loan-to-value ranges.
| Loan-to-Value Ratio | Standard Premium (Current) | Standard Premium (Effective May 1st, 2014) |
|---|---|---|
| Up to and including 65% | 0.50% | 0.60% |
| Up to and including 75% | 0.65% | 0.75% |
| Up to and including 80% | 1.00% | 1.25% |
| Up to and including 85% | 1.75% | 1.80% |
| Up to and including 90% | 2.00% | 2.40% |
| Up to and including 95% | 2.75% | 3.15% |
| 90.01% to 95% – Non-Traditional Down Payment | 2.90% | 3.35% |
CMHC reviews its premiums on an annual basis and, going forward, plans to announce decisions on premiums in the first quarter of each year.
| Loan Amount | $150,000 | $250,000 | $350,000 | $450,000 |
| Current Premium | $4,125 | $6,875 | $9,625 | $12,375 |
| New Premium | $4,725 | $7,875 | $11,025 | $14,175 |
| Additional Premium | $600 | $1,000 | $1,400 | $1,800 |
| Increase to Monthly Mortgage Payment | $3.00 | $4.98 | $6.99 | $8.98 |
Based on a 5 year term @ 3.49% and a 25 year amortization
| Loan Amount | $150,000 | $250,000 | $350,000 | $450,000 |
| Current Premium | $2,625 | $4,375 | $6,125 | $7,875 |
| New Premium | $2,700 | $4,500 | $6,300 | $8,100 |
| Additional Premium | $75 | $125 | $175 | $225 |
| Increase to Monthly Mortgage Payment | $0.37 | $0.62 | $0.87 | $1.12 |
Based on a 5 year term @ 3.49% and a 25 year amortization
