OTTAWA — 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 CMHC logo is seen on a Quebec City office, September 15, 2010. (Photo: Canadian Press Images/Francis Vachon)
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.