Mortgage Blog

CMHC Legislative Limit

February 28, 2012 | Posted by: Crescent Mortgage Corp.

There have been rumblings about the Canada Mortgage and Housing Corporation approaching its legislative limit for mortgage default insurance; currently at more than 90% of its $600 billion cap. Nearly three-quarters of the money is going into, so-called, portfolio insurance on low-risk, standard ratio mortgages.

CMHC has approached its limit in the past and the ceiling has been raised. But there are suggestions Ottawa might not do that this time, given its widely expressed desire to cool the housing market. Maintaining the CMHC cap could do that by drying up the portfolio insurance and tightening the amount of capital the banks have to lend. Canada’s private mortgage insurers say they’re in a strong position to provide coverage if CMHC can’t.

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