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Home ownership gets slightly more expensive May 1, 2014 (for some)


As you may have already heard, home buyers without a 20% down payment, will soon be paying more to buy a house. As of May 1st, 2014 the standard CMHC mortgage insurance premiums will be increased by an average of 15%. This is the first rate hike to premiums since 1998.


With an average home price hovering around $300,000 in SK, the current insurance premium with 5% down is 2.75% or $7,837.50. Once the changes take effect this will become 3.15% or $8,977.50. A difference of $1140, or roughly $5 per month on a standard 25 year mortgage payment.


The two other private insurers (Genworth and Canada Guaranty) have also followed suit and will be charging the same premiums as of May 1st. A full list of all changes can be found here: http://www.cmhc.ca/en/hoficlincl/moloin/moloin_013.cfm


So what can we as home buyers do to combat this fee? I have two tips to help you ease the pain of these recent changes:


Make sure your financing has been submitted for approval prior to May 1st. As long as you make an offer and your bank/lender submits the file prior to May 1st, you can move in months later and the new premiums will not apply. I know this is a little unrealistic being that we are only days away from these recent changes but it is the most immediate solution.


Offset the expense with a better mortgage rate (you knew this was coming). Again, based on $300,000, a .10% difference in your mortgage rate, you will save roughly $1400 over the course of a standard 5 year term.


All in all, if you qualify to buy a home today, the changes should not impact your ability to purchase the same home after May 1st. Debt ratios will remain almost identical with the $5 per month increase to a mortgage payment so although these are higher costs, don’t expect them to change anything in the housing market.


Please free to send me an email, text, or call anytime. I am always happy to help home buyers with any questions they may have, strategize over future plans or save you money on your mortgage!


Riel Syrenne

TMG The Mortgage Group

306-260-9918

riel@mortgagegrp.com

Norm Fisher, Author of the TeamFisher Saskatoon Real Estate Blog

About Norm

Licensed in 1993, Norm brings a wealth of experience to TeamFisher. He has worked in every imaginable capacity including sales agent, office manager, team leader, broker and now, broker/owner. Norm has written a weekly review of the Saskatoon real estate market for more than 650 consecutive weeks which may make him the most consistent industry blogger in the world.Less...

Licensed in 1993, Norm brings a wealth of experience to TeamFisher. He has worked in every imaginable capacity including sales agent, office manager, team leader, broker and now, broker/owner. Norm has written a weekly review of the Saskatoon real estate market for more than 650 consecutive weeks which may make him the most consistent industry blogger in the world.

Norm is known for his passion for technology and can most often be found exploring and experimenting with the next big thing in real estate marketing. He was the first Saskatoon real estate agent to promote a home online and has been an early adopter of new technologies ever since. “Everything about this business has changed over the past 20 years, and it will happen again in the next ten. An open mind and a curious attitude are all that’s needed to continue to find new ways to serve our clients by delivering a faster, smoother, worry-free transaction,” says Norm.

In his spare time, Norm enjoys Crossfit and cycling, some years accumulating over 2,000 kilometres on the road. He’s a strong supporter of the Royal LePage Shelter Foundation and enjoys raising funds by joining fun, fitness-related initiatives like the Grouse Grind for Shelter. In 2015, he trekked the Peruvian Andes to Machu Picchu. In 2017 he walked the southern highlands of Iceland across mountains, sand, snow, ice, lava fields and forest for seven days. Collectively those initiatives raised over a million dollars for Canadian women's shelters.
 

Note: We are in the process of bringing this blog home to the TeamFisher.com domain and we have a lot of stuff to move! Another 700 posts can be found at normfisher.com where they'll remain until we can get them moved here.

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