Insured Mortgage approvals at 5% down to 19.99% down.
When you put down the minimum on a house in Ontario, 5%, you cost yourself the highest premium there is. Currently it sits at 4% Premium.
When you put down 10% on the house purchase price, you decrease this premium to 3.1%When you put down 15% on the house purchase price, you decrease this premium to 2.4%
These premiums are added to your Mortgage balance and paid within your Mortgage. For every $10,000 you owe on a mortgage balance the payment is roughly $45/month for each $10,000.
In this approximation, if your premium ended up being roughly 8K added on. We could look at an increase of $35 dollars on your monthly mortgage payment. For more accuracy, give us a shout, we love running numbers at Mortgage Suite.
There is a tax called PST on this amount of premium that gets added, and you must pay at your lawyers.
Also referred to as a Premium Rate table. Check out Sagen’s Premium Rate Table. This premium gets added to your mortgage amount when your file is underwritten at their level. So, even though the lender believes in your deal, they only believe in it because it can get insured. If the insurance declines it, you may be stuck putting 20% down.
Below is a an illustration to help you understand the charges that would be associated on the purchase, and at the lawyers.
Lastly, there are 3 insurers that perform these INSURED mortgage, and charge the premium.
They are Genworth, CMHC ( Government Owned), and Canada Guaranty. You can click on the names to check out their sites. They all offer similar products with titles such as:
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Stated-income
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New to Canada
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5% down purchases
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Second home purchases
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Divorce programs
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Other insured products and services that change throughout market conditions.
Congrats! You have completed Insured Mortgages 101.
So, if you still have questions, or would like to submit a call back click here. We can go through your unique situation, explain it in full, and get you the solutions you need now.
7 responses to “Why Your Mortgage Needs Default Insurance”
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