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Canada Mortgage and Housing Corp. is raising the mortgage insurance premiums for the first time since 1990’s and suggested that even more hikes could be on the way.
The increase will apply to policies obtained May 1 and later. Genworth, the private mortgage insurer in Canada, also quickly followed suit. Mortgage insurance is required by lenders when the borrower has less than 20% down payment.
The impact of the increase will be trivial for those in the 80-85 per cent loan to value ratio (between 15-20% down), and will most affect those with only a 5% down payment. Even still, with current interest rates and based on a 25 year amortization, the increase would be about $5/month for a $350,000 mortgage. The premiums can be amortized over the length of the mortgage rather than being paid up front at closing if you so choose.
To avoid the increase in mortgage insurance premiums, an offer must be accepted and a mortgage application filed before the May 1 deadline.
If you are thinking about buying a home in Saskatoon, or have questions about mortgages-including if you qualify for a loan, I’d be happy to refer you to some quality mortgage brokers in Saskatoon.
Kari Calder
Saskatoon real estate agent
Century 21 Fusion
