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Updated: Small investors to be hit by CMHC move

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Guest | 27 Feb 2014, 06:31 AM Agree 0

The Canada Mortgage and Housing Corporation (CMHC) have  announced that it is increasing its mortgage mortgage insurance premiums for investors who will hold between one and four rental units.
The hike, estimated at 15 per cent for all mortgage-to-value ranges, will also apply to owner occupied and self-employed homeowners. The controversial move - which will come into effect on May 1 - does not apply to mortgages currently insured by the CMHC.
“The higher premiums reflect CMHC’s higher capital targets” said Steven Mennill, CMHC’s Vice-President, Insurance Operations. “CMHC’s capital holdings reduce Canadian taxpayers’ exposure to the housing market and contribute to the long term stability of the financial system.”
According to the CMHC, for the average Canadian homebuyer requiring CMHC insured financing, the higher premium will result in an increase of approximately $5 to their monthly mortgage payment.
As expected, other mortgage insurance companies followed suit. Genworth Canada announced on Monday that it was also raising its rates on May 1.
"We believe this new pricing is prudent and more reflective of increased regulatory capital requirements," says Brian Hurley, Genworth Canada chairman and CEO. "These pricing actions are supportive of the long-term safety and stability of the Canadian housing market."
  • Darlene Albert | 06 Mar 2014, 10:24 AM Agree 0
    This is baloney, This is someone(s) who decided to pitch an idea and make it sound like its going to benefit and protect the people from themselves. Not impressed. The gov have already affected the economy all on their own that the real estate market is taking a plunge. So what do most sectors have ...nada...zilch...very few buyers on the market. The slow down is greatly affecting everyone surrounding the real estate market, such as lawyers, notaries, appraisers, real estate agents, etc. With the trickle down affect its affecting large and small purchases. It has put a huge damper on spending and with the cuts to government employees people are spending their saved RRSP money to make ends meet. Great job there!!!
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