March 8, 2017
CMHC announced that starting March 17th, they will be increasing premiums on insured mortgage loans. If you are considering buying a home soon and looking to save some money, having your application submitted before March 17th, 2017 could be a wise decision.
Impact on Premium Increase
| Loan-to-Value |
New Premium |
Old Premium |
|
Up to and including 65% |
0.60% | 0.60% |
|
Up to and including 75% |
1.70% |
0.75% |
|
Up to and including 80% |
2.40% |
1.25% |
|
Up to and including 85% |
2.80% |
1.80% |
|
Up to and including 90% |
3.10% |
2.40% |
|
Up to and including 95% |
4.00% |
3.60% |
| 90.01% to 95% — Non-Traditional Down Payment** |
4.50% |
3.85% |
Example on a $400,000 Purchase Price with a 15% down payment:
| Old Premium | New Premium | |
|
Purchase Price |
$400,000 | $400,000 |
|
Down Payment |
$60,000 | $60,000 |
|
Total |
$340,000 | $340,000 |
|
Premium |
$6,120 @ 1.80% | $9,520 @ 2.80% |
|
Final Mortgage |
$346,120 | $349,520 |
The difference in the Premium would cost you an extra $3,400 initially but since this amount is also added to your mortgage and then amortized with interest it will actually cost you a bit more over the life of your mortgage.
Note: Rules and guidelines are subject to change. Please inquire within.
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