Valley First

Mortgage Insurance Hike Coming

Mortgage insurance hike a good pause for thought for homebuyers

April 10, 2015

Penticton, B.C.—Canadian homebuyers will be paying just a little bit more to become homeowners in 2015. Come June, two of Canada’s three major high-ratio mortgage insurers, CMHC and Genworth, will increase their insurance premiums for buyers with a down payment of less than 10 per cent.

“As part of a monthly mortgage payment, the additional premium cost doesn’t feel that substantial,” says Tara Vanden Pol, senior manager of retail and commercial credit at Valley First, a division of First West Credit Union. “But with the average house price in the Okanagan and at 10 per cent or less down, the total extra premium can add up to a lot of money.

In an example scenario provided by CMHC, a homebuyer purchasing a $450,000 home with a down payment of less than 10 per cent, at a rate of 2.79 per cent and a 25-year amortization, can expect to pay an additional $2,025 in insurance premiums.

“For homebuyers who are already scraping together every cent for a sizeable down payment and making sure they can afford their monthly mortgage payments, the extra dollars could be a tipping point,” adds Vanden Pol. “We encourage people to be honest with themselves to make sure they’re not stretching their household budget too far when pursuing home ownership.”

About Valley First

Valley First is a premier provider of banking, investment and insurance services for residents and businesses in the Okanagan, Similkameen and Thompson valleys. As a division of First West Credit Union, B.C.'s third-largest credit union with 54 branches and 38 insurance offices throughout the province, Valley First brings innovative products, an extensive branch network and local decision making to the banking experience. For more information on Valley First, visit www.valleyfirst.com.

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