Skip to content

TagCMHC

CMHC higher premiums start today

CMHCCMHC’s new higher insurance premiums take effect today.  That means it will cost you a little more if you are buying a home with less than 20% down.  The increases are minor and aren’t expected to have any effect on the housing market.  (by the way, CMHC has adjusted these premiums before)

What’s puzzling is why they felt the need to do this.  CMHC produces a healthy profit. As a crown corporation, those profits go directly into the government coffers.   CMHC arrears are at 0.33%.  That’s close to an all time low.

I guess it’s a good way to increase profits but they are making $2billion per year!   Here’s the old and new premiums.

Loan-to-Value Ratio Standard Premium (Current) Standard Premium (Effective May 1st, 2014)
Up to and including 65% 0.50% 0.60%
Up to and including 75% 0.65% 0.75%
Up to and including 80% 1.00% 1.25%
Up to and including 85% 1.75% 1.80%
Up to and including 90% 2.00% 2.40%
Up to and including 95% 2.75% 3.15%
90.01% to 95% – Non-Traditional Down Payment 2.90% 3.35%

Your best interest is my only interest.   I welcome your questions and comments.  Like this article?  Share it with a friend.

Steve Garganis 416 224 0114 steve@mortgagenow.ca

 

CMHC mortgage insurance rates increasing but still cheaper than 10 yrs ago.

CMHCCanada 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.   Continue reading “CMHC mortgage insurance rates increasing but still cheaper than 10 yrs ago.”

Poloz in, Carney out as Bank of Canada Governor…3 major changes in less than a year!! Anyone else find this strange??!.

Poloz, Carney, Flaherty Stephen Poloz was announced as Mark Carney’s replacement as the new Bank of Canada Governor.  The announcement was a surprise for many… Most thought the Deputy Governor, Tiff Macklem, would have been a more likely candidate.  But Jim Flaherty, Minister of Finance, chose Poloz…. probably because he shares the same vision as Flaherty…  tighter lending rules, higher rates.. etc..

But this article isn’t about why Poloz is in, and Macklem is out.   I want to bring something else to your attention.   Did you know that we have had 3 major changes in less than 6 months?   Mark Carney is leaving Canada to head the Bank of England.   Then, within 6 months, the head of OSFI, Julie Dickson, announced she will be leaving in 2014.   And now Karen Kinsley, CEO of CMHC, has announced she is stepping down.  I’ll add in a fourth.. Robert P. Kelly has come in as Chairperson of CMHC… You’ll need to read this to understand why this is relevant.

These are major changes folks.  OSFI, CMHC and the Bank of Canada Governor.   3 major players that run and regulate Canada’s Financial and Banking sectors.  Has anyone asked why  they are all leaving now? Continue reading “Poloz in, Carney out as Bank of Canada Governor…3 major changes in less than a year!! Anyone else find this strange??!.”

CMHC CEO Karen Kinsley out, Wall Street banker Robert Kelly in… anybody asking why??

Karen Kinsley Karen Kinsley has been with CMHC (Canada Mortgage and Housing Corporation) for 25 years.  The last 10 as it’s CEO.  CMHC makes buying a home more affordable by insuring the mortgage against default.  End result is a lower down payment requirement and lower interest rates.   CMHC is profitable.  They earned $1.7 billion in 2012 and $17 billion over the last 10 years.

In 2012, the Federal govt and the Minister of Finance decided to move CMHC under OSFI (Office of the Superintendent of Financial Institutions).   OSFI is a regulatory body that provides regulation and supervision to 152 Banks, Trust companies and other Lenders.   They function like auditors.  A move questioned by many and one that contradicts the spirit of what CMHC is supposed to stand for.

Enter Robert P. Kelly.  Mr. Kelly was appointed as Chairperson of the Board of Directors of CMHC this same month.  Coincidence?  Here’s a bit of history on Robert KellyKelly….He worked at TD Bank from 1981 to 2000 leaving as a senior executive that was on the short list to be TD’s CEO.. he didn’t get the job and left for the U.S. to join Wachovia, then later Bank of New York Mellon as CEO and Chairman.  I remember Mr. Kelly from my days working at TD.  He was always a higher profile, more visible executive…  Continue reading “CMHC CEO Karen Kinsley out, Wall Street banker Robert Kelly in… anybody asking why??”

Top Banking regulator stepping.. OSFI’s Julie Dickson leaving in 2014

Julie Dickson Julie Dickson, the head of OSFI (Office of the Superintendent of Financial Institutions) will not be back when her term expires in July 2014.  She’s decided to not to stick around after making more lending rule changes in 2012, than I have ever seen, during my entire 23 year career working in financial services.   OSFI is a regulatory body that provides regulation and supervision to 152 Banks, Trust companies and other Lenders.   In short, they are auditors.  Here’s a link to the major changes made just last year including putting CMHC under OSFI control.. more on that later..

Some say her claim to fame is that she was in charge during the worst banking and mortgage crises in history.  And that Canada came out of this global financial collapse way better than any other country.   It’s true, we did come out of this very well compared with the rest of the world…   But what does Ms. Dickson and OSFI have to do with it?  For me, this had more to do with luck, govt intervention and Canadians being our normal conservative selves.   We were a little slower to adapt to U.S. style lending policies… Ask any financial expert and they will tell you we were just a few years behind the U.S. with regards to their wild mortgage lending guidelines… Continue reading “Top Banking regulator stepping.. OSFI’s Julie Dickson leaving in 2014”

%d bloggers like this: