CMHC increase is unfair, say investors

The new CMHC premium hike for default insurance – coming into effect this Thursday, May 1 – is unfair to those who want to make a profitable business, argues one investor.

The controversial mortgage insurance hikes will hurt investor bottom lines and could potentially put a dent in some portfolio plans.

Speaking to CREW, investor Sahil Jaggi says mortgage insurance companies should not be “lumping” all property owners in the one group.

“It is a little added cost that I feel, as an investor, is obviously a little pinching,” he says. “If the government can see if a person has more than 50 per cent in most of his properties, and has decent income, certainly the CMHC rate should be a little more lenient for those investors as opposed to people who have a bad record.”

The Canada Mortgage and Housing Corporation (CMHC) announced in February that it would increase its mortgage loan insurance premiums for investors who hold between one and four rental units.

The hike, averaging at 15 per cent for all loan-to-value ranges, also applies to owner occupied and self-employed homeowners. Genworth also announced its rate hike at the same time.

Jaggi says that the premiums should be implemented on a case-by-case basis. “If they do it this way, they will be able to encourage investors who are maintaining their portfolios at a very safe and cautious way already.”

Are you looking to invest in property? If you like, we can get one of our mortgage experts to tell you exactly how much you can afford to borrow, which is the best mortgage for you or how much they could save you right now if you have an existing mortgage. Click here to get help choosing the best mortgage rate

COMMENTS

Get help choosing the best mortgage rate

Just fill in a few details, and we'll arrange for a Mortgage adviser to help you find the best mortgage for your needs

  • How soon do you want a mortgage?
  • Name
  • Where do you live?
  • Phone number
  • E-mail address

Industry news

Submit a press release

Poll

Should government update pot rules to prohibit growing in rentals?