Mortgage Insurance – Good News For Home Buyers

  • 0

Mortgage Insurance – Good News For Home Buyers

Although home prices are on the rise in Canada, as much as 10%, there"s good news for being able to afford your house. This news would have a direct impact for home buyers that would fall into the 80% to 100% purchase price for their homes.

What"s New For Mortgage Insurance,

Some people are in the situation that they can"t put 25% down, and are required to pay thousands of dollars in mortgage life insurance. According to the mortgage broker firm Invis, people in this position accounted for 42% of the market at the end of September.

In a research note to its brokers Invis has tracked the impact of competition and risk-based pricing on mortgage where the customer borrow 100% of the price of a home. Some of the changes Invis noted for people who take a high ratio insured mortgage are:

Mortgage insurance is mandatory is you have a down payment of less than 20%.

For people who borrow 100% of the cost of their home, insurers are now now factoring in the borrower"s credit score in a way that can lower this cost of coverage. This is called risk-based pricing, and it"s the way that almost all insurance works.

This use of risk-based pricing is the result of increasing competition in the mortgage insurance business. Where there used to be only to players in the field, the federal government"s Canada Mortgage and Housing Corp, and Genworth Financial, there are new players as well.

How Does This Change Buying Mortgage Insurance,

When Genworth announced that is would allow buyers to borrow up to 95% to 100% of their mortgage at 3.75%, a new mortgage insurance company called AIG United Guaranty said it would offer the same coverage for 3.70%.

Could this trend in rewarding responsible borrowers become more prevalent in the mortgage insurance business, Short of a retreat in house prices, the best bet for improved affordability for home buyers would seem to be further competition between mortgage insurers.


Leave a Reply

Jessica Post
Jessica Post
07:52 18 May 17
Wayne is very thorough and accommodated all my annoying questions like a champion! He was also able to complete the inspection quickly and provided his report in a timely manner. Highly recommend.
Kai Ikeuchi
Kai Ikeuchi
11:24 23 Mar 17
Wayne was very professional and assisted us quickly. We required an inspection with a turnover of 2 days. He was able to provide us with the relevant information so that my fiancé and I could make a better decision when bidding for our future house. Thanks to Wayne and Inner West Property Inspection, we were able to be confident with our decisions.
Genevieve McCabe
Genevieve McCabe
15:14 14 Feb 17
I just had my home inspected by Inner West Property Inspections this week and the peace of mind is worth every cent. I am buying an older inner west home and Wayne was skilled, patient and thorough. I highly recommend this service.
Karen L
Karen L
08:45 13 Feb 17
Wayne was punctual, polite, and neat and tidy. Very professional. He answered our questions and provided a great inspection report that we passed on to our solicitor. Would highly recommend him to anyone looking to have their future home inspected. Karen L, Ashfield
Gary Williams
Gary Williams
07:43 15 Feb 17
Inner West Property Inspections inspected a house I was looking to purchase in Marrickville. Wayne showed up on short notice as the auction was in 2 days. He provided a great, detailed report and called the next day to clarify something. Top level service and knowledge! Gary Williams, Marrickville
Andrew Gee
Andrew Gee
20:42 24 May 17
Wayne provides an excellent service. He explains any issues in terms that the clients can easily understand and offers real world advice on how to go about any repairs or rectification works required. The ultimate professional in his field, and a really nice bloke too!
Nasir Shah
Nasir Shah
11:46 21 May 17
Wayne was fantastic. Not only did he perform a very thorough inspection, but the turn around time was incredibly fast. He is an absolute professional, and offers a first class service!
See All Reviews