Canada Mortgage and Housing Corporation (CMHC) announced they will be increasing the cost of insurance premiums effective May 1st. The premium increase is minimal and isn’t expected to slow the mortgage volumes (see below for cost changes). The move isn’t that puzzling given that CMHC’s most recent financial statements from 2013 show their volumes are down due to the Federal govt mortgage rule changes… but interestingly, profits were up 11% for the first nine months of 2013.
CMHC made $1.27billion as of September 30th 2013. Not bad for a crown corporation that was created to encourage home ownership in Canada. CMHC puts a lot of money in the government coffers. Arrears are lower at 0.33%.. that’s considered extremely low. Some would say this is just a cash grab. But I think it’s just being proactive as taking action before the expected volumes decrease.
CMHC PREMIUMS ARE STILL CHEAPER THAN THEY WERE 10 YEAR AGO
But here’s the bright side. Read the rest of this entry »