Many questions from first time buyers lately. Yes, the mortgage premiums are going up for insured purchases.
Both Genworth (Canada’s largest private mortgage insurer) and CMHC are increasing their premiums for anyone with a loan-to-value ratios greater than 65%.
Below outlines what the current premium is and what will be taking effect in 6 weeks (on March 17, 2017), for funded mortgages at that time.
|Loan-to-Value Ratio||Standard Premium (Current)||Standard Premium (Effective March 17, 2017)|
|Up to and including 65%||0.60%||0.60%|
|Up to and including 75%||0.75%||1.70%|
|Up to and including 80%||1.25%||2.40%|
|Up to and including 85%||1.80%||2.80%|
|Up to and including 90%||2.40%||3.10%|
|Up to and including 95%||3.60%||4.00%|
|90.01% to 95% Non-Traditional Down Payment||3.85%||4.50%|
They are indicating that its only a $5 increase per month on your mortgage but that’s the lowest amount for the lowest value of mortgage.
For the Average home sale in Guelph, around $350,000 and if you put at least 10% down, this will be about a $12 difference per month. What that means if you’re looking at the cost of the home, with current interest rates that is about a minimum $3000-$4000 more house you could buy before March 17th. Food for thought…