Default mortgage insurance is in place to cover the lender in case the borrower defaults on his payments. It is mandatory in Canada for any mortgage loan over 80% of the equity/value of the property. In some instances lenders will require this for mortgages of less than 80%. Default mortgage insurance is a cost to the borrower. Default Insurance Providers in Canada include:
- CMHC
- Genworth
- Canada Guarantee
Effective May 1st the following rate increase will come into affect for insured mortgages: Please see the linked news release from CMHC:
http://www.cmhc-schl.gc.ca/en/corp/nero/nere/2014/2014-02-28-1100.cfm
Effective May 1st, CMHC Purchase (owner occupied 1 to 4 unit) mortgage insurance premiums will increase by approximately 15%, on average, for all loan-to-value ranges.
|
Loan-to-Value Ratio |
Standard Premium (Current) |
Standard Premium (Effective May 1st, 2014) |
|
Up to and including 65% |
0.60% |
0.60% |
|
Up to and including 75% |
0.75% |
0.75% |
|
Up to and including 80% |
1.25% |
1.25% |
|
Up to and including 85% |
1.8% |
1.80% |
|
Up to and including 90% |
2.40% |
2.40% |
|
Up to and including 95% |
3.60% |
3.15% |
|
90.01% to 95% – Non-Traditional Down Payment |
3.85% |
3.35% |