Canada Mortgage & Housing Corp. increasing rates
Canada Mortgage & Housing Corporation, one of the major insurers of non-conventional mortgages, just announced a significant hike in their rates. While the good news is that these fees are usually worked into the mortgage (meaning no large, up-front payment for the home buyer), these hikes will still hit many first-time home and condo buyers HARD.
The biggest increases, percentage-wise, will be affecting home buyers who can least afford it. Buyers with only 5% down, and purchasing a home in the $160,000 dollar range will be facing a 14.5% increase in CMHC fees.
Here is an example of the fee hikes as they affect anyone who needs a 95% mortgage (5% down payment)
Since these rate increases don’t take affect until May 1st, 2014, home and condo buyers might feel pressured to buy something before that date. The announcements seems to indicate that a mortgage application must be submitted prior to May 1st, 2014 to qualify for the old fees, regardless of what the ‘closing date’ or possession date will be.
Anyone thinking of buying a house or condo should consult with their mortgage professional. If you would like a referral to a mortgage specialist or mortgage broker, at a bank, credit union or mortgage brokerage, please call me right away…. Bo Kauffmann (REMAX) 204-333-2202