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The Canadian Mortgage and Housing Corporation (CMHC) will raise mortgage loan insurance premiums for homeowners and some rental properties on May 1, 2014.
The decision came as the CMHC conducted its annual review of its insurance products and capital requirements. According to a release published on the CMHC’s site, the increase will apply to mortgage loan insurance premiums for owner-occupied, self-employed and one-to-four unit rental properties.
“The higher premiums reflect CMHC’s higher capital targets,” said Steven Mennill, CMHC’s vice-president of 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.”
The average Canadian homebuyer who requires CMHC insured financing can expect an increase of about $5 to their monthly mortgage payment. Those who are already insured by the CMHC will not be affected by the new premiums.
The CMHC does not expect these changes to have an impact on the housing market.