CMHC: Mortgage Loan Insurance is Up

Earlier this week, Canada Mortgage and Housing Corporation (CMHC) released their quarterly financial report on earnings and trends.

One of the most notable trends from the report, is that mortgage loan insurance is up 11.2 per cent across Canada from last year. Further to this, mortgage loan delinquencies are up in Alberta.

Simply put, people are having a harder time with down payment amounts, and are having some difficulty keeping up with there mortgage payments.

More Albertans are having difficulty paying their mortgages on time, according to data from the Canada Mortgage and Housing Corporation. As of the end of June, the federal Crown corporation said 1,487 of its loans in Alberta were at least 90 days late in paying mortgages that CMHC insures. That’s up from 978 a year ago. [CBC]

However, there are some bright points of the CMHC report that we can pull positivity from:

• Homebuyers with CMHC-insured mortgages have a strong ability to manage their debts as supported by an average credit score of 750 for transactional homeowner loans.
• The overall arrears rate with CMHC insured mortgages is down from the first quarter of 2016, sitting currently at 0.32 per cent.

In case you’re unsure what mortgage insurance is, it’s required when homeowners have a down payment that is less than 20 per cent of the purchase price of the home. Homeowners pay premiums to their mortgage insurer (ex: CMHC, Genworth).

If you have questions about the current state of the housing market in Alberta, about mortgage insurance, coming up with down payments or loans and debts in general, please contact me.

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