Here is a schedule of the actual increase in fees.
For my comments on what this all means see my last post here
Please contact me by phone at 403-681-4376 or my email at email@example.com
- Increases are only for 5% down payment buyers.
- Clients who get submissions in prior to June 1st will be eligible for old premiums.
- Effective June 1st, (owner occupied 1 – 4 unit) mortgage loan insurance premiums will be:
|Loan-to-Value Ratio||Standard Premium
(Effective June 1st, 2015
|Up to and including 65%||0.60%||0.60%|
|Up to and including 75%||0.75%||0.75%|
|Up to and including 80%||1.25%||1.25%|
|Up to and including 85%||1.80%||1.80%|
|Up to and including 90%||2.40%||2.40%|
|Up to and including 95%||3.15%||3.60%|
|90.01% to 95% — Non-Traditional Down Payment||3.35%||3.85%|
All this from Mortgage Mark Herman, top Calgary Alberta mortgage broker for home purchases and mortgage renewals.
The new fees are not that big a deal. It will add a bit but not much. All the news is just noise by the press looking to turn out an easy article. Below are my comments that will be in the Calgary Sun this week.
Mark Herman, top Calgary Alberta mortgage broker for home purchase mortgage and renewal mortgages.
The additional $1,925 added to mortgage costs ends up costing an extra $8.81 a month for a $450k purchase – the average home price in Calgary – with 5 per-cent down on the maximum 25 year amortization.
“This really should not be that big a deal in the overall picture. We’re talking about the most expensive purchase most people make. An extra $2450 should not be a deal breaker. If it is, the buyers should really second think their continued ability to afford a home, especially if you consider that interest rates are at all-time 115-year lows. A rate increase, even back to what is considered the theoretical minimum of 4 pre-cent for the 5-year fixed, closed mortgage, should be considered more than this minor cost increase.”
For an average home at $450,000, the new increases with the budget for land title registration cost AND the new CMHC insurance premium for 5% down – from 3.15% to 3.6%:
The increase in the CMHC fee goes to $15,390 from $13,466 or an increase of $1,925.
The increase in the land title registration cost – attached – is an extra $525.
Total increase is $2,450 or 0.5% total increase in the costs to buy a home with 5% down payment.
Really not a big deal when you consider:
- Alberta does not have a 1% property transfer tax like B.C. and Ontario
- The cost for registration and land titles was cut by Ralph Klein years ago and has not increased since
- Buying a home for almost half a million dollars has only increased by 0.5% and
- Mortgage rates are at, and continue to hold at, now record lows; most mortgage broker rates are 2.69% for a full featured, 5 year mortgage with all the bells and whistles.
Fee increases may cause sticker shock for potential Calgary homebuyers
Fee hikes in Thursday’s provincial budget will add more than $1,000 to the cost of buying an average home in Alberta …
… The province said several real estate-related fees will increase effective July 1. Among the announced changes, the transfer/title creation flat fee rises from $50 to $75, while the variable fee will jump from $1 to $6 for each $5,000 in home value. Mortgage registration fees are to increase the same amount.
On a $450,000 mortgage, that would mean an increase from $140 to $540 for each.
“Unfortunately, these fees are assessed at the end of the real estate transaction and so are not included in the purchase price of the house, nor can they be rolled into the mortgage, so homebuyers will need to come up with that extra cost,” Copeland said.
Corinne Lyall, president of the Calgary Real Estate Board, said the government has kept fees low for some time. This is the first time since 2011 that the flat fee for property and mortgage registrations has increased.