New CMHC rates may INCREASE cost of a mortgage!
2015-04-07 | 20:01:18
CMHC Premium Increase Coming June 1st
Written by Jay Seabrook, VP of Operations, at Dominion Lending Centres
Canada Housing and Mortgage Corporation (CMHC) announced late last week that effective June 1st, insurance premiums for those who have less than 10% down payment will rise 45 basis points to 3.6%. CMHC indicated this will only add about $5 per monthly payment.
That doesn't sound too bad - what's the catch?
Our very own Shaun Serafini from DLC Mortgage Excellence wrote on Mortgage Broker News:
"What is lost in the $5-per-month analogy is the erosion of a homebuyer's initial equity position brought by the higher premium. They are now getting less than 1.5 per cent equity in a home despite coming up with fiver per cent down payment (not a small feat in itself these days). This is almost a full percentage of equity loss from the last wave of premium increases. Homebuyers will now be further behind the mark in terms of equity from the outset and CMHC doesn't seem to care too much about that fact."
Should you have any questions or comments about the information please let me know. Also, do not hesitate to get in contact regarding your plans for a first time mortgage or the current product you have and what that means for you just around the corner. I would love the opportunity to be a part of your team working toward increasing your financial success each and every day.
DLC - Mortgage Excellence