On February 28th Canada Mortgage & Housing Corporation (CMHC), Canada’s national housing agency, announced it will be increasing its mortgage insurance premiums effective May 1st, 2014. This insurance, more commonly known as mortgage default insurance, is required when a home buyer places less than 20% down. On average the increase is expected to be about 15% and CMHC has indicated the impact of these changes would see mortgage payments rise by about $5 per month. They’ve also confirmed existing mortgages are not affected by this change.
CMHC, which is a Crown corporation, controls approx. 70% of the mortgage default insurance market, with the remainder shared between two private mortgage insurance providers, Genworth MI Canada Inc and Canada Guaranty Mortgage Insurance Company. As yet neither of these companies has commented on this announcement.