CMHC has increased its mortgage loan insurance premiums for homeowner and rental properties effective May 1, 2014.
The increase applies to mortgage loan insurance premiums for owner occupied, and 1-to-4 unit rental properties, including low-ratio refinance premiums. This CMHC Premium Increase does not apply to mortgages currently insured by CMHC.
Why did CMHC Increase Mortgage Insurance Premiums?
CMHC’s capital management framework is consistent with international practices and Canadian guidelines for mortgage insurers. Increased capital targets are consistent with Canadian and international industry trends and makes the financial system more stable and resilient.
“The higher premiums reflect CMHC’s higher capital targets” said Steven Mennill, CMHC’s Vice-President, Insurance Operations. “CMHC’s 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.
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.
How Much is the CMHC Mortgage Insurance Premium Increase?
CMHC reviews its premiums on an annual basis and, going forward, plans to announce decisions on premiums in the first quarter of each year.
Questions about CMHC Mortgage Insurance Premiums?
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