Higher Mortgage Rates With A Bigger Down Payment???
So you're ready to purchase a property and you're in a good enough financial position to come up with a 20% down payment (or greater) so you should expect the best interest rates available, right? Though this concept makes sense, it's simply not how the current mortgage market works. Why? Let me explain... In the beginning of 2017, the Office of the Superintendent of Financial Institutions (OSFI) instated new, greater capital requirements for mortgage default insurers to create a larger buffer for future mortgage defaults in an effort to provide more financial stability for Canada's mortgage market. By March 1st, 2017 insurance premiums were increased anywhere from 11% to 126% depending on the loan-to-value/size down payment. Everyone knows that buying a home with less than 20% down requires an insured mortgage and the borrower pays the premium. What most people don't know is that a lot of mortgage lenders (primarily non-bank lenders) still insure mortgages where