Mortgage, Money and Dream – Our thoughts on Canadian Mortgage Market
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CMHC new premium for high risk loans

When a borrower offers to put no down payment at all (zero down) to purchase a home and to get a mortgage loan – is considered as a high risk borrower. People offering 5% are not exactly like the ones who have no money at all but […]

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CMHC abandons mortgage loan insurance for condominium development.

Canada Mortgage and Housing Corporation announced that it is bringing in two changes in its mortgage insurance business. The Crown Corporation has been struggling in many fronts. While it is not exactly in a financial trouble but it has drawn critics from many areas. Some of them […]

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Canada Guaranty changes rental income formula

There are various ways how rental income can be included in debt service calculation. The major Canadian mortgage insurers generally adapt to two methods. Rental offset Rental income Rental offset: Rental offset calculation method takes care of the rental expense minus rental income before it gets added […]

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CMHC tightens its rules for second homes and BFS

CMHC-BFS-2nd-home-rule-change

Only a few weeks ago CMHC announced that it will be raising its mortgage insurance premium effective from May 1st 2014. What we did not anticipate that it is considering further restrictions. It was only a couple of days ago when we have learnt about its further […]

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CMHC and Genworth to raise mortgage default insurance premium

85% loan to value premium changes

Canada Housing and Mortgage Corporation (CMHC) has announced that it will raise the mortgage default insurance premium it charges the borrowers with small down payments (normally 5% to 20%). If you buy a home after May 1st and do not have more than 20% down payment then […]

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Will mortgage default insurance premium go up?

CMHC - Total Insurance In Force - Q3-2013 ($ billion)

CMHC covers the lenders at the expenses of the borrowers. If you are at the borrowing end of the stick then the pain is yours. In order to own a home -if you do not have enough money –  your mortgage has to be secured against any […]

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Should Canada lay off CMHC?

Canadian five years bond yield 10 years chart Nov 13

Inflation has been performing under the normal level for a long time. Bank of Canada with their so called monetary stimulus failed to revive inflation to a healthy level. Beside weak inflation, strong housing is another serious threat to our economy – if it is in a […]

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First Time Home Buyers – How they shop for mortgage

Income of the first time home buyer

CMHC has published its First Time Home Buyers Survey. It is full of useful information for the mortgage professionals. That does not mean that a home buyer can not gain form it. It is very useful to understand the mindset of a first time home buyer. Who […]

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Should CMHC lower its premium?

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 […]

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Effective date for new debt service ratio calculation postponed till end of 2014

Few months ago CMHC proposed new changes to the way how debt service ratios are calculated. The main three sticking points were to include – 1)      Unsecured lines of credit and credit cards 2)      Secured lines of credit and 3)      Heating costs. CMHC reported – (at that […]

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A look into mortgage prepayment penalty – as a MBS investor

Paying penalty to break a mortgage term is not a pleasant experience. You have probably experienced the pinch once or twice during your homeownership. It is interesting to see how the penalties decide pool types on mortgage backed securities. The NHA mortgage backed securities guide speaks a […]

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CMHC Q2, 2013 results – Insurance-In-Force went down

CMHC - Insurance In Force - Q2-2013  billion

CMHC reported lower mortgage default rate for the last quarter. Arrears rate went down but there is no news if the premium will go down? Probably CMHC’s risk is not that closely associated with arrear rates. Following are some interesting stats from CMHC’s last quarterly results.

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