CMHC announced this morning they will be increasing mortgage insurance premiums on March 17, 2017.
The changes are significant for those interested in mortgages with a 10-20% down-payment:
|Loan-to-Value Ratio||Standard Premium (Current)||Standard Premium (Effective March 17, 2017)|
|Up to and including 65%||0.60%||0.60%|
|Up to and including 75%||0.75%||1.70%|
|Up to and including 80%||1.25%||2.40%|
|Up to and including 85%||1.80%||2.80%|
|Up to and including 90%||2.40%||3.10%|
|Up to and including 95%||3.60%||4.00%|
|90.01% to 95% – Non-Traditional Down Payment||3.85%||4.50%|
The changes were a result of the OFSI changing the capital holding requirements of mortgage insurance institutions in Canada (affecting CMHC, Genworth MI and Canada Guaranty) and I have telegraphed this well in advance in my previous analyses of Genworth MI.
It is quite probable that Genworth MI will follow suit and this will result in a substantial increase in premiums written for the company in the 2nd to 4th quarter of 2017. The market has not picked up on this at all.