Homeowners Mortgage Loan Insurance Premiums On The Rise

April 21st, 2014 by

Canada Mortgage and Housing Corporation (CMHC) has announced that effective May 1, 2014, homeowner mortgage loan insurance premiums will be increased.

|Mortgage loan insurance is paid by borrowers of real estate. The amount of the premium can be added to the principal sum of the mortgage. The coverage provided by this insurance is for the benefit of the lenders. It provides that in the event of a default under the mortgage the lender will be insured for any loss sustained. Having this insurance available allows consumers to purchase real estate with a down payment of as little as 5%. Lenders require mortgage loan insurance when consumers by real estate with a down payment of less than 20% of the purchase price.

The increases will be as follows:

Loan-to-Value Ratio

Standard Premium (Current)

Standard Premium
(Effective May 1st, 2014)

Up to and including 65%

0.50%

0.60%

Up to and including 75%

0.65%

0.75%

Up to and including 80%

1.00%

1.25%

Up to and including 85%

1.75%

1.80%

Up to and including 90%

2.00%

2.40%

Up to and including 95%

2.75%

3.15%

90.01% to 95% – Non-Traditional Down Payment 2.90%

3.35%

For more information regarding the rise of homeowners mortgage loan insurance premiums, please contact Toronto residential real estate lawyer, Robert Adourian at 416-446-3303 or http://www.devrylaw.ca/robert-adourian-toronto-residential-real-estate-lawyer.


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