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American Mortgage Insurers Coming to Canada

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)