Mortgage Insurance To Get Costlier As CMHC Hikes Rates

Canada Mortgage and Housing Corp. is raising the cost of mortgage loan insurance effective March 17.
The Crown corporation estimates the increases will add about $5 to a monthly mortgage payment for its average homebuyer.
CMHC says the changes reflect new regulatory requirements that came into effect on Jan. 1 that require mortgage insurers to hold additional capital. 

The premiums are calculated based on the loan-to-value ratio of the mortgage being insured.

The size of the increase in rates depends on that ratio.

Lenders typically require mortgage loan insurance when a homebuyer makes a down payment of less than 20 per cent.
The cost can be paid in a single lump sum, but CMHC says the amount is often added to the mortgage principal and repaid over the life of the loan.

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