Check out the increase in CMHC premiums (insurance on mortgage loans). If you are putting less than 10% down payment, this will increase your monthly mortgage payment. Listing inventory is going up rapidly now that warm sunny weather is here and the tulips are up - there are lots of houses to choose from. If you want to buy this spring, best to do it before June!!
CMHC Announces Changes to Mortgage Default Insurance Premiums
The Canada Mortgage and Housing Corporation (CMHC) recently announced it will be raising its mortgage default insurance (MDI) premiums on June 1, 2015, for homebuyers that finance home purchases with less than a 10% down payment. This fulfills CMHC’s August 2014 commitment that they would boost their capital reserves above the minimum set by the Office of the Superintendent of Financial Institutions.
The changes do not apply to mortgages currently insured by CMHC and the currentpremiums will apply to all MDI applications to CMHC before June 1, 2015, regardless of closing date.
For the average Canadian homebuyer with less than a 10% down payment, CMHC premiums will rise by 0.45% to 3.6% which translates into an increase of $5 in monthly mortgage payments; for those with a “non-traditional” down payment of less than 10%, premiums will increase by 0.5% to 3.85%, or about $6 per month.