Insured Mortgage approvals at 5% down to 19.99% down.
When you put down the minimum on a house in Ontario, 5%, you cost yourself the highest premium there is. Currently, it sits at 4% Premium.
When you put down 10% on the house purchase price, you decrease this premium to 3.1%
When you put down 15% on the house purchase price, you decrease this premium to 2.4%
These premiums are added to your Mortgage balance and paid within your Mortgage. For every $10,000 you owe on a mortgage balance the payment is roughly $45/month for every $10,000.
In this approximation, if your premium ended up being roughly $8,000 added on. We could look at an increase of $35 dollars on your monthly payment. For more accuracy, give us a shout we love running numbers at Mortgage Suite.
There is a tax called PST on this amount of premium that gets added, and you must pay at your lawyers.
Also, it is called a PREMIUM as it is added to your mortgage. This premium gets added when your file is underwritten at their level.
So, even though the lender believes in your deal, they only believe in it because it can get insured. If the insurance declines it, you may be stuck putting 20% down.
Below is a table to help you understand the charges that would be associated with the purchase, and with the lawyers.
| Purchase Price 1st MORTGAGE | $ 485,000.00 | |
| Downpayment | 5% | |
| Total Downpayment | $ 24,250.00 | |
| Total Mortgage To Mortgage | $ 460,750.00 | |
CMHC Cost Insurance |
$ 18,430.00 |
|
| Total payment is based on this 1st mortgage | $ 479,180.00 | |
| The money you have to Come up with on Closing | ||
| Total Downpayment | $ 24,250.00 | |
| Deposit on offer | -$ 1,000.00 | |
CMHC PST (what government charges 8%) |
$ 1,474.40 |
|
| Lawyer Fee | $ 850.00 | |
| Disbursements approximate | $ 450.00 | |
| Land Transfer Taxes ( First Home Rebate) | $ – | |
| Title Insurance | $ 275.00 | |
| TOTAL AMOUNT TO BRING TO LAWYER | $ 26,299.40 | |
| Total payment is based on this 1st mortgage | $ 479,180.00 | |
| Interest Rate INSURED RATE | 1.69% | |
| Payments per month | $674.85 | |
| Property Taxes per month | $ 273.75 | |
| House Insurance *** | $ 100.00 | |
| Total Monthly Outputs | $1,048.60 | |
Lastly, there are 3 insurers that perform these INSURED mortgages and charge the premium.
They are SAGEN, CMHC ( Government Owned), and Canada Guaranty. You can click on the names to check out their sites. They all offer similar products with titles such as:
- Stated-income
- New to Canada
- 5% down purchases
- Second-home purchases
- Divorce programs
- Other insured products and services change throughout market conditions.
Congrats! You have completed Insured Mortgages 101.
So, if you still have questions, or would like to submit a call back click here. We can go through your unique situation and explain it in full and get you the solutions you need now.
