To MJK ^^, here is how fees are calculated:
Quote:
Originally Posted by MoneyGuy
CMHC fees are calculated on a sliding scale based on the down payment and amortization period. On a 5% down purchase CMHC fees are 2.75% of the mortgage amount on an amortization period of 25 years or less. For a 30-year amortization add 20 basis points and for a 35-year amortization add another 20 basis points. So for a new home buyer where qualifying is tight they typically will pay 3.15% of the mortgage amount which is added on to the mortgage total.
For 10% down the fee is 2% with the same additions for an amortization over 25 years. For a 15% down mortgage the fee is 1.75% with the same additions of an amortization over 25 years. If you put 20% down you do not require CMHC fees or typically the lender will pick them up on your behalf. Your goal should be to have a 20% down payment, if possible. This isn't feasible for a lot first-time homebuyers, of course, so then fees will apply.
On a typical home purchase of $350,000 with 5% down and an amortization period of 35 years, the fees are $10,473. This fee protects the lender, not the buyer. A strong consideration should be given to avoiding the fee.
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