June 9th - 2005

CMHC lowers insurance premiums

First time buyers will get a break on mortgage insurance thanks to a 15 per cent reduction in premiums by Canada Mortgage and Housing Corporation (CMHC).

First time buyers will get a break on mortgage insurance thanks to a 15 per cent reduction in premiums by Canada Mortgage and Housing Corporation (CMHC). This is the second premium reduction CMHC has made in the past two years bringing the total decrease to 30 per cent.

For a homebuyer with a $120,000 mortgage and five per cent down, 15 per cent off means they save $600. But combine that 15 per cent with the 15 per cent premium reduction of two years ago, and now they save $1,200 on the same transaction.

How it works
Homebuyers can benefit from the premium reduction provided they are purchasing a home with less than 10% of the purchase price down and have a CMHC insured mortgage.

There will be a six-month transition period to give financial institutions time to update their systems and incorporate these cost savings. In the meantime, CMHC will provide the refund equivalent to the premium reduction directly to eligible borrowers. A refund cheque will come in the mail within about six weeks after the mortgage closing date. After the transition period, the reduction in premium will be applied when buyers obtain their mortgage insurance eliminating the need for a refund.

Title protection coming
While the premium reduction took effect in April, CMHC is also planning to include title-related risk protection in its mortgage insurance products at no additional cost this fall. So not only will buyers save money on premiums, they’ll also have the added peace of mind that title insurance offers.

To find out more about CMHC’s mortgage insurance products, call 1-800-668-2642 or visit www.cmhc.ca.

Recent CMHC incentives help homebuyers
CMHC recently added other incentives to its mortgage insurance to meet the changing needs of Ontario residents and other Canadians wanting to purchase a home. CMHC has:

  • expanded the sources of down payment for borrowers with demonstrated financial abilities through its new Flex Down incentive;
  • improved access to all of its homeowner mortgage insurance products for self-employed Canadians;
  • allowed qualified borrowers to use any of its existing homeowner products when they purchase or refinance a second home; 
  • announced a 10 per cent refund on its mortgage insurance premiums when a borrower buys or builds an energy-efficient home or makes energy-saving renovations, to help meet Canada’s climate change objectives and supporting healthy, sustainable communities by. This same premium rebate is also available for rental development and energy retrofit.

OREA’s Home Ownership Incentives brochure lists CMHC as well as other incentives available to Ontario homebuyers. Copies can be purchased at your real estate board, or by using the standard OREA order form.

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For more information contact

Ontario Real Estate Association

Jean-Adrien Delicano

Senior Manager, Media Relations

JeanAdrienD@orea.com

416-445-9910 ext. 246

Ontario Real Estate Association
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