Friday, February 28, 2014

Fri Post #2: CMHC Announcement - Much Ado About Very Little?

So the big CMHC announcement, which had the real estate industry all a tither, was made this morning and the result was a bit of a yawner.

As we speculated yesterday, it was all about CMHC premiums.

Starting in May Canada's national housing agency has increased the amount of money that homeowners with less than 20% down payments must pay to insure their mortgages.

On 95% Loan to Value mortgages the standard premium rises from 2.75% to 3.15%. Under the old system, that borrower would pay an insurance premium of $6,875 for a $250,000 mortgage. Under the new system, their premium would jump by $1,000 to 7,875. On a typical 25-year mortgage at 3.49 per cent, that person would be paying $4.98 more on their mortgage payment, every month, to pay down the fee.


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  1. HI, with Vancouver prices this high, would it be reasonable to increase the first time home buyer price tax break from 425 000 cap to let's say 600 000? Is this thing adjusted annually?

    1. Anonymous, the property transfer tax exemption was recently increased to $475,000. It's part of the provincial budget, so yes, it's delivered annually. Whether it ought to be bumped considerably is another question -- in my opinion, no. If you can afford a $600,000 house as a first-time buyer, you can afford to pay the tax. If you can't afford the tax, you can't afford the house.

  2. Nice salute to the Bard of Avon.....but it's a much more appropriate tag line for your recent nuclear fixation.