Canada Mortgage and Housing Corporation (CMHC) just announced an increase to their default insurance rates. Anyone purchasing their home with less than a 20% down payment is required to have their mortgage insured against default. The premium charged for that insurance has increased to as much as 3.15% of the amount borrowed from the current 2.75%. What this means is that on a mortgage of $250 000 the increase will amount to an additional $1000 on your mortgage which will increase in your monthly mortgage payment.
The good news is that this doesn’t come into effect until May 1, 2014. As long as you arrange your mortgage prior to May 1, 2014 (closing date can be after May 1, 2014) you won’t be subject to this increase. Click here to read the CMHC article.
Interest rates are still low and house prices continue to slowly move upwards even though sales have been down slightly over the last couple months. According to the latest announcement from Royal Lepage “housing has continued to maintain its momentum and expect a 3.7% increase in home prices this year”.
The Canadian mortgage landscape seems to change monthly. Having a mortgage professional who is not only knowledgeable but passionate about all things mortgages is your best bet when it comes to offering sound advice. If you know someone that has a question about buying a home or refinancing contact me anytime.
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