If you haven’t heard yet CMHC announced some changes to the mortgage default insurance premiums they will be charging for insured mortgages. Just to clarify, any property purchased with less than 20% down payment requires mortgage insurance. Rather than just state what the premium increases are, I would like to show you the impact the changes will have on your monthly mortgage payment.

Below are the mortgage numbers if you purchased a home today with a 5% down payment:

$350,000 Basic Mortgage
$9,625 – 2.75% – Mortgage Default Premium
$359,625 Total Mortgage
25 Year Amortization
$1,755.87 Monthly Mortgage Payment

Below are the mortgage numbers if you purchase a home on May 1, 2014 or later with a 5% down payment:

$350,000 Basic Mortgage
$11,025 – 3.15% -Mortgage Default Premium
$361,025 Total Mortgage
25 Year Amortization
$1,762.71 Monthly Mortgage Payment

Your mortgage default premium & total mortgage would increase by $1,400. Your monthly payment will increase by $6.87. This change is not that earth shattering of a move by CMHC and will not have a huge impact on your mortgage payment or mortgage qualifications. However, if you are sitting on the homebuying fence, I would strongly recommend you re-evaluate your mortgage options and get into the market before May 1! Why pay more for the same thing!!!!