CMHC Changes

Starting in May, CMHC (Canada Mortgage and Housing Corportation) will be raising their premiums.

In Canada, homebuyers are legally obligated to purchase home insurance if they lack 20% of the home's total purchase price.  This protects the lender should the homeowner become unable to pay the mortgage.  CMHC is the largest mortgage insurer in Canada, its next biggest competitor being Genworth.

The premiums are being raised by 0.4%.  This raise might not seem like a huge number but its impact will be felt mostly by the homebuyers who have only the minimum 5% downpayment.  On an average mortgage of $250,000 the old premium was $6,875.  It is now $1,000 more expensive.  This number may only equate to about $5 a month but with the current economy still not recovering to where it was previously every dollar counts.

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