Rising insurance premiums bump up costs
If you’re in the market for a mortgage, and have less than 20% downpayment, then you might want to get that mortgage before May.
For the first time in more than a decade, Canada Mortgage and Housing Corporation (CMHC) is raising premiums for insuring mortgages on Canadian homes: an average 15%. Private insurer Genworth followed suit with a matching increase. Canadian homebuyers are required to have mortgage insurance if they have less than 20% equity in their homes.
How does it hit your wallet? A first-time homebuyer with a $248,000 mortgage and a 5% downpayment will pay an extra $5 per month in insurance premiums. If you are self-employed, a larger fee may apply.
The change will come into effect on May 1st. Homebuyers will be able to access the current lower rates if they have bought a home and are approved before the May 1 deadline, even if they have a later closing date.