Tuesday, January 29, 2008

Question for the readers: CMHC at mortgage renewal?

I have a question for those Canadian homeowners and mortgage experts out there.

As I've mentioned in the past, Ms. Loonie and I bought our condo using a CMHC-insured, high-ratio mortgage. We've since paid off our CMHC premium, and are now making progress on the "real" mortgage principal. Our mortgage will be up for renewal in June 2009.

My question is this: is there a possibility that we will have to pay another CMHC premium when we renew our mortgage, if we have less than 20% equity at renewal?

I'm hoping that our initial premium covers us for the entire life of the mortgage, and not just for the initial term. I just haven't been able to find a definitive answer.

I'd appreciate any insight you can provide.

UPDATE

I found the following via Red Flag Deals:
http://www.calgarybestmortgage.com/renew.html

Q: When switching my mortgage to a new lender, will I need to pay CMHC insurance fee again? Are there any expenses I need to be aware of?


When switching an insured mortgage, CMHC insurance number will simply be transfered to a new lender at no cost to you. Typically on a mortgage switch lenders will also cover your legal and appraisal expenses for you.
Based on this, it seems that we're insured for the entire life of the mortgage, based on our initial premium. Does that sound right?

2 comments:

dawger said...

Wow, you almost scared me for a minute. I'm pretty sure the CMHC fee is covered for the life of mortgage!

Anonymous said...

CMHC, Genworth or AIG (in Canada) are paid once upon each term of the mortgage. IF upon renewal, you are looking at another 5 year term, however no changes to ANY other terms (amortization, balance, or sometimes lender, etc) then no you will not have to pay again. HOWEVER if you make any changes (as mentioned in sentence before) then you will either pay a top up (if blended and extended) or another amount.