Genworth Canada has announced that it too shall be increasing the premiums for some of its mortgages from June 1 2015. This matches a move announced last week by Canada Mortgage and Housing Corp (CHMC). Buyers with a down payment of 10% or less will now see their premiums increase by up to 15%. Mortgage insurance provides protection for lenders who provide money to home buyers and owners. The factors involved in determining the homebuyer’s or owner’s premium is calculated my numerous factors including how much is borrowed and how much the property is worth.
Genworth says it believes the higher premiums for people with small down payments won’t have a major impact on home affordability but the higher pricing will support the long-term health of Canada’s system for financing housing. The new rate for a loan-to-value ratio up to 95 per cent is 3.6 per cent, up from 3.15 per cent. For a loan-to-value ratio from 90.01 to 95 per cent, but a non-traditional down payment, the premium climbs to 3.85 per cent from 3.35 per cent.