Insurance Premiums Set To Rise
March 8, 2017
CMHC has announced that starting March 17, 2017, they will be increasing premiums on insured mortgage loans.
If you're considering buying a home in the near future and looking to save some money, submitting your application before that date may be a wise decision.
Impact on premium increase:
| Loan-to-Value | New Premium | Old Premium |
Up to and including 65% | 0.60% | 0.60% |
Up to and including 75% | 1.70% | 0.75% |
Up to and including 80% | 2.40% | 1.25% |
Up to and including 85% | 2.80% | 1.80% |
Up to and including 90% | 3.10% | 2.40% |
Up to and including 95% | 4.00% | 3.60% |
| 90.01% to 95% — Non-Traditional Down Payment** | 4.50% | 3.85% |
Example on a $400,000 purchase price with a 15% down payment:
| Old Premium | New Premium | |
Purchase Price | $400,000 | $400,000 |
Down Payment | $60,000 | $60,000 |
Total | $340,000 | $340,000 |
Premium | $6,120 @ 1.80% | $9,520 @ 2.80% |
Final Mortgage | $346,120 | $349,520 |
The difference in the default insurance premium would cost you an extra $3,400 initially, but since this amount is also added to your mortgage and then amortized with interest, it will actually cost you a bit more than that over the life of your mortgage.
Have questions? Give us a call, stop by one of our store locations, or get a call back when it's convenient for you — we're always here to give you great mortgage advice.
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