Canadian borrowers with $250,000 in home loan and less than 10 per cent in down payment may be facing an extra $5.20 per month, after the Canada Mortgage and Housing Corp. (CMHC) raised its
mortgage insurance premium.
Effective 1 June, the insurance premium jumped to about 15%, but homebuyers with 10 per cent and above in down payments are spared. CMHC’s portfolio insurance and multi-unit insurance products also remain unchanged, CBC
"CMHC completed a detailed review of its mortgage loan insurance premiums and examined the performance of the various sub-segments of its portfolio," said Steven Mennill, CMHC's senior vice-president for insurance.
"The premium increase for homebuyers with less than a 10 per cent down payment reflects CMHC's target capital requirements which were increased in mid-2014."
New data shows that the “loan-to-value ratio up to 95 per cent is 3.6 per cent, up from 3.15 per cent,” CBC said in its report. Moreover, for a loan-to-value ratio from 90.01 to 95 per cent, but a non-traditional down payment, the premium soars to 3.85 per cent from 3.35 per cent.
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