The impending arrival of American mortgage insurer AIG United Guaranty has forced Canada’s mortgage insurers to be more competitive. Here’s a good article by Canadian Business Online about what this means to you: Story Link
Points of interest:
- Almost 1/2 of Canadians are required by law to purchase mortgage insurance.
- Canada has just two insurers: CMHC (70% market share) and U.S.-based Genworth (30% market share)
- Three new U.S. insurers have applied to do business in Canada
- AIG United Guaranty is one of them. It may be the first to offer insured 50-year and 0% down mortgages
- Next summer Canadians will only need 20% down to avoid mortgage insurance (instead of 25% now) according to a federal department of finance announcement.
All of this may add up to higher home prices eventually–and some fear more foreclosures. The easier it is to get a mortgage, the more people can pay for a house.
Seperately, Canada’s Finance Minister has denied a Globe and Mail report that CMHC may be sold. (Source: Reuters story)
