Effective May 1st the Canada Mortgage and Housing Corporation (CMHC) will be increasing their rates for mortgage default insurance. This the insurance which allows Canadians to buy a home with as little as 5% down payment. This increase in the insurance premium will apply to all residential and 1-4 unit rental property purchases.
You can see the full details here.
Though this is a 15% increase in premium the average (for all of Canada) mortgage loan with 5% downpayment is $248,000. This increase will only add about $5.00 a month to a mortgage payment.
For Belleville area real estate, our average home sale is quite a bit less at about $215,000. This would create a loan amount of just over $200,000 making the effect of this increase very nominal. It should have little effect on a Buyer’s ability to qualify for a new mortgage.
These increase will take effect for all applications after May 1st, 2014. Any mortgages approved prior to May 1st will be insured at the current rates.