04 Mar CHANGES AT CMHC
As a result of its annual review of its insurance products and capital requirements, CMHC is increasing its mortgage loan insurance premiums for homeowner and 1 – 4 unit rental properties to reflect its increased capital targets.
CMHC’s capital management framework is consistent with international practices and Canadian guidelines for mortgage insurers. Higher capital targets are consistent with Canadian and international industry trends and make the financial system more stable and resilient. As CMHC mortgage insurance is backed by taxpayers, capital holdings reduce Canadian taxpayers’ exposure to the housing market, and contribute to the long term stability of the financial system.
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 1, 2014, the premiums will increase by 15%, on average. The premiums** and premium surcharges will be as follows:
Loan Amount top up
Up to and including 65% 0.60% 0.60%
Up to and including 75% 0.75% 2.60%
Up to and including 80% 1.25% 3.15%
Up to and including 85% 1.80% 4.00%
Up to and including 90% 2.40% 4.90%
Up to and including 95% 3.15% 4.90%
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