Vancouver, BC – April 16, 2015. The British Columbia Real Estate Association (BCREA) reports that a total of 9,101 residential unit sales were recorded by the Multiple Listing Service® (MLS®) in March, up 37.6 per cent from the same month last year. Total sales dollar volume was $5.8 billion, an increase of 57.1 per cent compared to a year ago. The average MLS® residential price in the province rose to $641,799, up 14.1 per cent from the same month last year.
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“BC home sales climbed significantly in March,” said Cameron Muir, BCREA Chief Economist. “More homes traded hands last month than any March since 2007. On a seasonally adjusted basis, March posted the most home sales of any month since December of 2009.”
“Rock bottom interest rates and rising consumer confidence have strengthened housing markets in most regions of the province, added Muir. “Many board areas are now exhibiting sellers’ market conditions with home prices advancing well above the overall rate of inflation.”
During the first quarter, BC residential sales dollar volume was up 33.2 per cent to $12.7 billion, compared to the same period last year. Residential unit sales were up 22.5 per cent to 20,139 units, while the average MLS® residential price was up 8.7 per cent at $630,435.
OTTAWA, ONTARIO–(Marketwired – April 2, 2015) – As a result of its annual review of its insurance products and capital requirements, CMHC is increasing its homeowner mortgage loan insurance premiums for homebuyers with less than a 10% down payment. Effective June 1, 2015, the mortgage loan insurance premiums for homebuyers with less than a 10% down payment will increase by approximately 15%.
For the average Canadian homebuyer who has less than a 10% down payment, the higher premium will result in an increase of approximately $5 to their monthly mortgage payment. This is not expected to have a material impact on housing markets.
Premiums for homebuyers with a down payment of 10% or more and for CMHC’s portfolio insurance and multi-unit insurance products remain unchanged. The changes do not apply to mortgages currently insured by CMHC.
“CMHC completed a detailed review of its mortgage loan insurance premiums and examined the performance of the various sub-segments of its portfolio,” said Steven Mennill, Senior Vice-President, Insurance. “The premium increase for homebuyers with less than a 10% down payment reflects CMHC’s target capital requirements which were increased in mid-2014.”
CMHC is mandated to operate its mortgage loan insurance business on a commercial basis. The premiums and fees it collects and the investment income it earns cover related claims and other expenses while providing a reasonable rate of return on its capital holding target.
CMHC contributes to the stability of Canada’s housing finance system, including housing markets, by providing qualified Canadians in all parts of the country with access to a range of housing finance options in both good and bad economic times.
Effective June 1st, CMHC Purchase (owner occupied 1 – 4 unit) mortgage loan insurance premiums will be:
Loan-to-Value Ratio
Standard Premium (Current)
Standard Premium (Effective June 1st, 2015)
Up to and including 65%
0.60%
0.60%
Up to and including 75%
0.75%
0.75%
Up to and including 80%
1.25%
1.25%
Up to and including 85%
1.80%
1.80%
Up to and including 90%
2.40%
2.40%
Up to and including 95%
3.15%
3.60%
90.01% to 95% – Non-Traditional Down Payment
3.35%
3.85%
CMHC reviews its premiums on an annual basis and will announce decisions on premiums following this review.
Canada Mortgage and Housing Corporation (CMHC) has been Canada’s authority on housing for more than 65 years.
CMHC helps Canadians meet their housing needs. As Canada’s authority on housing, we contribute to the stability of the housing market and financial system, provide support for Canadians in housing need, and offer objective housing research and advice to Canadian governments, consumers and the housing industry. Prudent risk management, strong corporate governance and transparency are cornerstones of our operations.
For additional highlights please see the backgrounder info below and visit CMHC’s key fact sheet.
BACKGROUNDER
Mortgage loan insurance helps protect lenders against mortgage default and enables consumers to purchase homes with a minimum down payment of 5% with interest rates comparable to those with a 20% down payment. Mortgage loan insurance is typically required by lenders when homebuyers make a down payment of less than 20% of the purchase price.
CMHC’s new premium rates will be effective for new mortgage loan insurance requests submitted on or after June 1, 2015. The current mortgage loan insurance premiums will apply for applications submitted to CMHC prior to June 1, 2015, regardless of the closing date. As is normal practice, complete borrower and property details must be submitted to CMHC when requesting mortgage loan insurance.
The increase applies to mortgage loan insurance premiums for residential housing of 1 and 2 units for homebuyers with less than a 10% down payment.
CMHC mortgage loan insurance premium is calculated as a percentage of the loan based on the loan-to-value ratio. The premium can be paid in a single lump sum but more frequently is added to the mortgage principal and amortized over the life of the mortgage as part of regular mortgage payments.
CMHC reviews its premiums on an annual basis and has adjusted them several times since being commercialized in 1998. Adjustments have included both increases and decreases to the premiums.
CMHC’s capital holdings reduce Canadian taxpayers’ exposure to the housing market and contribute to the long term stability of the financial system. In August 2014, CMHC increased its capital holding target from 200% to 220% of the minimum OSFI requirements.
In 2014, the average CMHC insured loan at 95% loan-to-value was $252,530. Based on this figure, the higher premium will result in an increase of approximately $5 to the monthly mortgage payment for the average Canadian homebuyer. This is not expected to have a material impact on housing markets.
Genworth Canada To Increase Mortgage Insurance Premium Rates For Some Customers
(RTTNews.com) – Genworth MI Canada (MIC.TO) Monday said that effective June 1, it would increase its mortgage insurance premium rates for homebuyers with less than a 10 percent down payment by around 15 percent.
A typical first-time homebuyer taking out a 95 percent loan-to-value mortgage of $300 000 will see an increase of approximately $6 in their monthly mortgage payment, based on a 2.79 per cent interest rate and 25-year amortization period.
“This new pricing is reflective of higher capital requirements and supports the long-term health of Canada’s housing finance system,” said Stuart Levings, President and CEO of Genworth Canada.
Vancouver, BC – March 13, 2015. The British Columbia Real Estate Association (BCREA) reports that a total of 6,661 residential unit sales were recorded by the Multiple Listing Service® (MLS®) in February, up 19.4 per cent from the same month last year. Total sales dollar volume was $4.3 billion, an increase of 24.8 per cent compared to a year ago. The average MLS® residential price in the province rose to $639,405, up 4.5 per cent from the same month last year.
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“Consumer demand remained robust in February on the strength of rock bottom interest rates and improving economic conditions,” said Cameron Muir, BCREA Chief Economist. “After several years of below-average activity, home sales are now trending above long-term levels.”
Total active listings on the market were down 7.5 per cent from a year ago. Fewer homes for sale, combined with elevated consumer demand has the housing market firmly in balanced conditions.
Year-to-date, BC residential sales dollar volume was up 18 per cent to $6.9 billion, compared to the same period last year. Residential unit sales were up 12.4 per cent to 11,038 units, while the average MLS® residential price was up 5.0 per cent at $621,065.
OTTAWA, ONTARIO–(Marketwired – April 2, 2015) – As a result of its annual review of its insurance products and capital requirements, CMHC is increasing its homeowner mortgage loan insurance premiums for homebuyers with less than a 10% down payment. Effective June 1, 2015, the mortgage loan insurance premiums for homebuyers with less than a 10% down payment will increase by approximately 15%.
