CMHC Increases Mortgage Insurance Premiums by 15%

The Canada Mortgage and Housing Corporation (CMHC) announced February 28th that they would be increasing mortgage insurance premiums by an average of 15%. The changes take effect on May 1st, 2014.

So how does this affect you? Well if you don't know what mortgage insurance is. First off I'll start by explaining. 

Mortgage loan insurance applies to home buyers who have a 5% to 20% downpayment. The insurance protects the lender in case of default since mortgage shoppers with downpayments under 20% are viewed as “slightly higher risk”.

The premium is paid by the homeowner as either a single lump sum, or it can be added to your monthly mortgage payments. The CMHC is a government organization that is the largest provider of mortgage loan insurance in Canada.

 Does The Change Affect Me?

The increase impacts you if:

  • You get a mortgage after May 1st
  • Your downpayment is between 5% to 20%

Note: The rise will have no affect on mortgages currently insured by CMHC.


 How Much Will My Monthly Payments Increase?

On average the increase will result in a $5 increase to your monthly mortgage payment. The larger your downpayment, the less impact it will have. Here’s a breakdown based on purchase price and downpaymen



If you have a 5% downpayment...


Purchase Price





Mortgage Amount





Increase to Monthly Mortgage Payment





If you have a 15% downpayment…


Purchase Price





Mortgage Amount





Increase to Monthly Mortgage Payment





Source: CMHC, Based on a 5 year term @ 3.49% and a 25 year amortization *Premiums in Manitoba, Ontario and Quebec are subject to provincial sales tax — the sales tax cannot be added to the loan amount.

If You're In the Market - Purchase Before May 1st!

If you’re currently in the process of shopping, you might want to consider closing before May 1st when these changes take place.

Want to save $98 a month on your mortgage?

When you’re home shopping remember to also shop for a great mortgage rate. Compared to the big banks you could save $98 on your monthly payment, $1,176 a year, and $29,400 over the course of your mortgage*. Compare the latest mortgage rates >

*2.99% 5 year fixed rate compared to a 3.49% mortgage rate and assumes a mortgage value of $38


 Save Money and Live Better

Happy House Shopping!


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