Rob Carrick points out in today’s column in The Globe and Mail that mortgage insurance that homeowners have to buy for a high-ratio mortgage is getting cheaper:
- Insurers are setting premiums for borrowers who are getting a mortgage for 100% of the value of their home based on the credit score. Competition among the insurers has driven down premiums at this level of borrowing to 3.1%.
- The federal government has introduced legislation that would reduce the mandatory insurance requirement from the current 25% to 20% resulting in a potential saving of 0.65%.
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3 responses so far ↓
1 Phil S // Dec 1, 2006 at 11:33 am
Who in their right mind would get a mortgage for 100% of the value of their home? The interest rate would likely be so high that your payments would be interest-only! The only circumstance that would make sense would be to buy a relatively inexpensive shoebox condo, but even then, if you can’t afford to put anything down, why are you getting one? Rent it!
2 StingyJoe // Dec 1, 2006 at 6:19 pm
Like you said, the article has introduced legislation that the min downpayment required will be 20% instead of 25%. However, whether or not the bill will pass legislation is another issue altogether. Like most Canadians, I hope the bill does pass.
Joe
http://www.StingyFinance.com
3 Hustlermoneyblog.com // Dec 1, 2006 at 11:11 pm
what about do a 80-15-5 loan? why not just do a 5% down payment to avoid the PMI.
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