In our last post we touched on what is required by a down payment, but many of us just don’t have the 20% to put down on the purchase of a house. That is when we turn to CMHC – Canada Mortgage and Housing Corporation. So who exactly is CMHC?
According to their website, “Canada Mortgage and Housing Corporation (CMHC) is Canada's national housing agency. We are committed to helping Canadians access a wide choice of quality, affordable homes, while making vibrant, healthy communities and cities a reality across the country. CMHC works to enhance Canada's housing finance options, assist Canadians who cannot afford housing in the private market, improve building standards and housing construction, and provide policymakers with the information and analysis they need to sustain a vibrant housing market in Canada.”
What does this mean to you, who is looking for a mortgage. Basically CMHC insures your mortgage for a premium allowing you to purchase a home without the full 20% down payment.
The premium charge from CMHC depends on the % of your down payment. 5% down is 2.75%, 10% is 2% and 15% is 1.75%, this premium can be added to your mortgage & is a onetime fee. Eg: a mortgage of $100,000 with 5% down would be $95,000, your CMHC premium of 2.75% added to the mortgage is $2,612.50 bringing your total mortgage to $97,612.50
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2 comments:
Nice information about CMHC. Their interest rates are comparatively low.
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