That didn’t take long.
Following CMHC’s 11 a.m. EST announcement that it is raising insurance premiums, Genworth Canada (the biggest private default insurer) is announcing its own price hikes. (See here)
Genworth’s new premiums also take effect May 1, 2014, and they match CMHC’s increases to standard default insurance.
“While regulatory capital requirements have increased significantly since the 2009 economic downturn, pricing has not kept pace,” said Genworth Canada Chairman/CEO Brian Hurley.
“This new pricing is more reflective of current regulatory capital requirements and supportive of the ongoing stability of Canada’s housing market.”
“…First-time homebuyers will not be materially impacted by this change,” he added.
Indeed they won’t, and even if they did, there is a cost to keeping Canada’s financial system secure. Many would agree that those with the highest-risk mortgages (e.g., 95% LTVs) should bear a bigger share of those costs.
Rob McLister, CMT (email)
Last modified: April 26, 2017
Hi Rob,
Is the increase based on more defaults based on the claim ratio by institutions for default mortgages, increasing cost and/or projected cost in the immediate years ahead?
Thanks.
Kris K