{"id":174,"date":"2006-11-02T16:18:56","date_gmt":"2006-11-02T22:18:56","guid":{"rendered":"http:\/\/www.montreal-realestate.ca\/english\/2006\/11\/interest-savings-through-mortgage-loan-insurance\/"},"modified":"2019-03-12T02:06:01","modified_gmt":"2019-03-12T02:06:01","slug":"interest-savings-through-mortgage-loan-insurance","status":"publish","type":"post","link":"https:\/\/www.montreal-realestate.ca\/english\/interest-savings-through-mortgage-loan-insurance\/","title":{"rendered":"CMHC &#8211; yes or no"},"content":{"rendered":"<table>\n<tbody>\n<tr>\n<td>This is an article that was posted on the <a href=\"http:\/\/www.cmhc-schl.gc.ca\/en\/co\/moloin\/moloin_016.cfm\">CMHC website<\/a>. It&#8217;s an interesting article showing you the difference between having CMHC involved or not. I am posting this article solely on the fact that there were all these \u201chidden\u201d fees if you didn\u2019t go through CMHC. Something to ask about and look for. HEADS UP!<strong>Spend less money \u2014 and buy your home sooner!<\/strong><br \/>\nWith CMHC mortgage loan insurance, your lower down payment helps you to buy your own home sooner \u2014 and access the most competitive interest rates in the market.<strong>Mortgage amount: <\/strong>$100,000<br \/>\n<strong>Term: <\/strong>3 year \u2014 closed<br \/>\n<strong>Down payment:<\/strong> 10%<strong>Scenario A:<\/strong><\/p>\n<ul>\n<li>Paul finances his mortgage using CMHC mortgage loan insurance.<\/li>\n<li>This gives him access to a 5.6% interest rate*.<\/li>\n<li>Paul pays a mortgage loan insurance premium of 2% of the loan amount ($2,000), which can be added to the mortgage amount.<\/li>\n<li>Based on this interest rate, Paul\u2019s monthly payment is $616.23.<\/li>\n<\/ul>\n<p><strong>Scenario B:<\/strong><\/p>\n<ul>\n<li>Paul\u2019s brother Marc finances his mortgage without mortgage loan insurance, through a lender that can offer home financing without requiring a down payment greater than 25%. Because the lender is not insured against borrower default, it is likely that Marc will pay a higher rate of interest than Paul in scenario A \u2014 approximately 6.6%*.<\/li>\n<li>The lender typically also charges a one-time administration fee of 3% of the loan amount to compensate for the additional risk. In this case, Marc paid a $3,000 administrative fee.<\/li>\n<li>Based on this interest rate, Marc\u2019s monthly payment is $675.90.<\/li>\n<\/ul>\n<p>*Based on actual April 2005 interest rates posted by a large National Lender using mortgage loan insurance and a smaller Lender who offers mortgage financing without requiring mortgage loan insurance.<\/p>\n<p><strong>Conclusion:<\/strong> After these first three-years:<\/p>\n<p><strong>Under Scenario B<\/strong>, Marc would pay an additional $2,915.46 in interest, as well as the extra $1,000 up front.<br \/>\n<strong>Under Scenario A<\/strong>, Paul\u2019s savings from the lower interest rate alone more than offset the cost of the mortgage loan insurance premium.<\/p>\n<p>Disclaimer from CMHC: Despite our best efforts, CMHC cannot guarantee that the information is accurate or complete or that it is up to date at all times.<\/td>\n<td valign=\"top\"><!--adsense#160x600--><!--adsense#160x600--><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>This is an article that was posted on the CMHC website. It&#8217;s an interesting article showing you the difference between having CMHC involved or not. I am posting this article solely on the fact that there were all these \u201chidden\u201d fees if you didn\u2019t go through CMHC. Something to ask about and look for. HEADS [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":8648,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","sfsi_plus_gutenberg_text_before_share":"","sfsi_plus_gutenberg_show_text_before_share":"","sfsi_plus_gutenberg_icon_type":"","sfsi_plus_gutenberg_icon_alignemt":"","sfsi_plus_gutenburg_max_per_row":"","_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2,5],"tags":[],"class_list":["post-174","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-home-buying-selling","category-mortgages-finances"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.5 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>CMHC - yes or no - Montreal Real Estate<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.montreal-realestate.ca\/english\/interest-savings-through-mortgage-loan-insurance\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"CMHC - yes or no - Montreal Real Estate\" \/>\n<meta property=\"og:description\" content=\"This is an article that was posted on the CMHC website. It&#8217;s an interesting article showing you the difference between having CMHC involved or not. I am posting this article solely on the fact that there were all these \u201chidden\u201d fees if you didn\u2019t go through CMHC. Something to ask about and look for. 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