CMHC increase premiums for high-risk home buyers.

Canada Mortgage and Housing Corporation is hiking premiums for mortgage insurance on its highest-risk borrowers.

Home buyers who put down less than 10% down payment will see their insurance premiums jump 15% starting in June 2015.

According to 2014 figures, borrowers who bought homes with a down payment of just 5% typically took on about $252,000 in mortgage debt, the housing agency said, and will see premiums rise by $5 a month.

  • The new rate for a loan-to-value ratio up to 95% is 3.6%
  • For a loan-to-value ratio from 90.01 to 95%, but a non-traditional down payment, the premium climbs to 3.85%

The premium increase for homebuyers with less than a 10% down payment, reflects CMHC's target capital requirements which were increased in mid-2014.

The federal agency is the country's largest insurer of home mortgages.

Article from: www.bnn.ca