Mortgage, Money and Dream – Our thoughts on Canadian Mortgage Market
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A recent report in Financial Post raises the question – should CMHC lower its premium?

We see the question as a popular move but it is hard to justify the demand. The bottom line is that if someone doesn’t like to pay the premium then just don’t pay it. There are ways to avoid it.

Falling mortgage default and higher profit margin can not be a reason it to reduce it s rates.  Apart from that there is enough competition in the market. Sometime it is better be left for the market to decide.

CMHC is here to help. The premiums are same for everyone. It is a balanced program sponsored by the people to help people access lower mortgage interest rate.

There are ways to avoid the premium;

  • First is by paying higher interest rate or the
  • Second is by putting 20% or 25% down payment.

You can not have best of the both world.

Second issue is – access to a shelter can be seen as a fundamental right by some but access to loan at a lower rate is not a right yet, probably will never be.

It could be a popular move but does not stand against logical test.