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5% Downpayment Expands Home Buying Options For Canadians.
With as little as five per cent down, all home buyers now have access to mortgage
insurance, Marc Rochon, President of Canada Mortgage and Housing Corporation
(CMHC), announced recently.
Beginning, May 11 1998, this mortgage insurance option will be available for first
time and previous purchasers, who can manage the costs of home ownership and
have a minimum downpayment of five per cent of the purchase price.
"Of the more than 610,000 Canadians who purchased their first homes over the
past six years, 70 per cent of these purchasers indicated they could not have
purchased without the five per cent down option," said Mr. Rochon. "This program
is extremely popular and important to home buyers as well as the housing industry."
"In making this program permanent, CMHC is ensuring that more people can benefit
from the current stable, predictable housing market well into the next millennium.
CMHC will continue consulting its customers and stakeholders and review the
program and price ceilings to ensure they meet the needs of Canadians."
To ensure consumers understand the costs and responsibilities involved with home
ownership, Mr. Rochon said that CMHC will enhance its information initiatives for
home buyers.
"CMHC will expand its participation in home buyers seminars and the distribution
of related publications and software to increase the knowledge of prospective
homeowners. Informed consumers are the best consumers," added President Rochon.
Mortgage insurance premiums will be 3.75 per cent for buyers who are making a
downpayment of as little as five per cent of a property's value. This is the percentage
of the mortgage loan a buyer is required to pay as insurance in case of default on
payment. Purchasers have the option of adding the premium to the mortgage and
paying it on a monthly basis.
The new program replaces the First Home Loan Insurance (FHLI) product, which
was scheduled to end in February 1999.
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