Mortgage Insurance Premiums Increasing on March 17th 2017

[TimLacroix]

More changes!
While it is unfortunate news to share, it was somewhat expected.

CMHC is increasing its homeowner mortgage loan insurance premiums as a result of their regular review of insurance products. New regulatory capital requirements came into effect on January 1, 2017 and require mortgage insurers to hold additional capital. Capital requirements are an important factor in determining mortgage loan insurance premiums.

The new premiums are effective March 17, 2017 and will result in an increase of approximately $5 to the monthly mortgage payment of the average CMHC-insured homebuyer ($250,000 mortgage loan with less than 10% down payment).

Revised Mortgage Loan Insurance Premium Rates are shown in the premium schedule below.



• CMHC’s new premium rates will be effective for new mortgage loan insurance requests submitted on or after March 17, 2017.

• CMHC’s current premium rates will apply for applications submitted to CMHC prior to March 17, 2017 regardless of the closing date.

[cycosis]

Is this likely to affect lending rates?

[TimLacroix]

Originally posted by cycosis
Is this likely to affect lending rates?

The premium increases will not have an affect on rates.

However, the Captial Requirements that have effected the insurers in Jan 2017... have already had an affect on lending rates for Conventional / Low Ratio mortgages. Which are mortgage with more than 20% down payment or equity.

[ercchry]

I learned today that you can get a 25% rebate for having a "green" home. New builds just need to be certified. Used homes need a pre-purchase inspection, then you get two years to put in the improvements

[TimLacroix]

Originally posted by ercchry
I learned today that you can get a 25% rebate for having a "green" home. New builds just need to be certified. Used homes need a pre-purchase inspection, then you get two years to put in the improvements

That is correct. You can receive up to 25% rebate on mortage default insurance premiums.

Sample below:



For more information, check out Genworth Canada link to Energy Efficient Home Program

[cycosis]

^ but thats only if you have a <20% down payment right?

[TimLacroix]

Originally posted by cycosis
^ but thats only if you have a &lt;20% down payment right?

That is correct...

[88CRX]

Originally posted by TimLacroix


The premium increases will not have an affect on rates.

However, the Captial Requirements that have effected the insurers in Jan 2017... have already had an affect on lending rates for Conventional / Low Ratio mortgages. Which are mortgage with more than 20% down payment or equity.

As in they've gone up? What's the reason for that happening?

[TimLacroix]

Originally posted by 88CRX


As in they've gone up? What's the reason for that happening?

Canada’s banking regulator (OSFI) had released revised capital guidelines for mortgage insurers in Sept 2016. Once implemented, insurers will have to set aside more capital in certain cases to shield them from a potential market blowup.

Here are some of the comments/ notes for the increase to premiums:

-- these premium hikes are due mainly to OSFI’s capital requirement changes, which took effect January 1, 2017.
-- OSFI’s new capital requirements include a formula based on LTV, credit score, location and other things.
-- Bulk insurance premiums have increased similar to the low-ratio transactional premiums as well

[OTown]

So would these would only be placed on new purchases prior to March, or on all existing CMHC premiums as well?

[TimLacroix]

Originally posted by OTown
So would these would only be placed on new purchases prior to March, or on all existing CMHC premiums as well?

The new premiums will be applied to new applications submitted on or after March 17.

[OTown]

Another question... Are the new rates effective upon possession or upon mortgage approval?

[TimLacroix]

Only 4 weeks remain before the Mortgage Insurance Premiums increase on March 17, 2017.

Thinking of purchasing? Contact me today (403-648-1541 / [email protected]) to get approved prior to cutoff dates which is established by lenders.

We may see cutoff dates as early as March 13 so that the files can be processed and submitted to the insurers.

[TimLacroix]

Only 1 week remain before the Mortgage Insurance Premiums increase on March 17, 2017.

Some lenders have set a cut-off date of March 13.

Thinking of purchasing? Contact me today (403-648-1541 / [email protected]) to get approved prior to cutoff dates which is established by lenders.