Good News For BUYERS!!!
Mortgage insurance changes will help buyers
MICHAEL KANE, Vancouver Sun
Published:
An amendment to the Bank Act allows borrowers to access conventional financing with a 20-per-cent down payment.
Previously home buyers were required to make a down payment of at least 25 per cent to avoid the added expense of mortgage insurance.
The change in law means annual savings of $2,500 for a borrower with a $250,000 mortgage representing up to 80 per cent of the home’s value, said Rob Regan-Pollock of mortgage brokers Invis in
High-ratio mortgage insurance will still be required for mortgages greater than 80 per cent of the home’s value.
“We believe that a great number of home buyers will benefit from this change,” Cid Palacio, Bank of Montreal vice-president, said in a press release.
“We see a number of customers scrambling to meet the 25 per cent down payment in order to avoid paying the insurance premium.”
Regan-Pollock said the change harmonizes Canadian regulations with those in the
In addition to insurance savings, the change will make it easier to obtain a large mortgage.
“This will have a big impact on our lenders in providing more flexibile guidelines for financing up to 80 per cent,” Regan-Pollock said. “In the past lenders were required to follow more stringent guidelines set by high-ratio mortgage insurers for financing above 75 per cent.”