Christine Buemann Mortgage Broker

CMHC announced this morning that they will be increasing their premiums across the board. See their press release here Here's a scenario: On a $300k purchase with 5% down, you will currently pay $10,260 in CMHC premiums and have a monthly payment of roughly $1365 After March 17 , on the same purchase, you will be paying $11,400 for CMHC premiums with a monthly payment of roughly $1371 That's a premium increase of $1140 and a monthly payment increase of roughly $6 a month For this mortgage to fit CMHC's recommended 32% max Gross Debt Ratio  the applicants on title would need a combined gross annual income of $75-80k, depending on the property taxes and heating costs This fee increase is in direct response to the last set of changes that were implemented by the Government on January 1st essentially making it more difficult for lenders to provide mortgages in Canada. This increase was expected during 2017and there is speculation that there will be yet another...

If you are in the market for a new home and you have 10% or less as your down payment, it is important to note that CMHC will be increasing their fees as of June 1st. The increase will be approximately 15% of the current rate. Who is CMHC? They provide default insurance to the banks which essentially covers the cost of the mortgage should the borrower default. The rates typically range from .60% to 3.35% and the premium is typically included in the total mortgage amount. They are funded and regulated by the Government of Canada and there are also 2 other private insurers – Genworth and Canada Guaranty. So what does this mean for you? Let's say you are purchasing a home for $300,000 with 5% down. Your new CMHC premium will increase by just under $1350 . That is also factored into the total mortgage amount which is amortized over 25 years. Your mortgage payment would increase by just over $6 a month at today’s rates* Although we are given until the end of the month to s...

The mortgage world has patiently been awaiting CMHC’s announcement this morning. They recently announced that they will be increasing their premiums for mortgage loan insurance as of May 1 st , 2014. Mortgage loan insurance is mandatory in Canada if you have less than 20% down. Many lenders also purchase the insurance where the borrower has more money down and they cover the cost to minimize their exposure to risk. The premiums typically range from .60% to 3.35% of the total mortgage amount and it is generally included in your mortgage.    So what is mortgage loan insurance? It basically protects the lender in the case that the borrower defaults The example provided on the CMHC website is for a $250,000 mortgage at 3.49% with 5% down and a 25 year amortization. With the rate premium increase, the mortgage insurance premium on this loan would increase by $1000 and the borrower’s monthly payments would increase by approximately $5 a month. For more examples and...