Tories crack down on CMHC with curbs on portfolio insurance

The federal government revealed their much anticipated 2013 budget this week, and has announced they are once again restricting the Canada Mortgage and Housing Corporation (CMHC) mortgage insurance sector.

For those obtaining a mortgage who have less than a 20% down payment, the purchase of mortgage insurance is mandatory, and most are insured by Canada's largest mortgage insurer, the CMHC. The two other major mortgage insurers, Canada Guaranty and Genworth Financial control the remainder of the mortgage insurance market. These private companies have a 350-billion dollar limit, in comparison to the CMHC at 600-billion. In an article from the Financial Post, we learn, "the new regulations will 'gradually limit' the issuance of low ratio mortgages to only those mortgages that are in the CMHC securitization program. Ottawa will prohibit the use of any taxpayer-backed insured mortgage, both high and low ratio, as collateral in securitization vehicles that are not sponsored by CMHC."

For more information on how these changes could affect you, talk to an Ottawa Mortgage Broker.

Click here for the full article from the Financial Post.