Canadians who plan on purchasing a home with a down payment of less than 20% will now have to pay larger mortgage insurance premiums.
Effective today, the premium rates for new mortgage loan insurance requests submitted on or after March 17 are as follows:
|Down payment %||Standard premium (current)||Standard premium (before March 17)|
|5% to 9.99%||4%||3.6%|
|10% to 14.99%||3.1%||2.4%|
|15% to 19.99%||2.8%||1.8%|
Canadians with a mortgage or those who applied for one before March 17 won’t be affected by the premium increase.
For a prospective homebuyer making the minimum down payment in the Fredericton area, where the average home price was $161,590 in February 2017, the mortgage payment will increase by $2.72 a month. But in Vancouver, if a homebuyer purchases a home at the average price of $995,583 and makes the minimum down payment, the monthly mortgage payment will rise by $16.35 a month.
In the examples below, we assumed just the minimum down payment required was made in each city or province/territory based on the average home price in February 2017. The CMHC insurance premium payments are based on those numbers, assuming a five-year fixed mortgage rate of 2.42%—the best mortgage rate available as of March 16—amortized over 25 years.