CAAMP issued a report Wednesday concluding that:
- The “vast majority of borrowers holding (the) highest risk mortgages have considerable room to absorb interest rate increases.”
- “…lenders and borrowers…have been highly prudent in the mortgage market.”
- “…housing demand in Canada has been justified by the strength of the economy.”
- “the degree of (mortgage) risk does appear to be extremely small.”
- “…Canadian lending criteria are already tight enough.”
Those who side with CAAMP’s empirical evidence believe the government acted too hastily on Monday, when it created an over-reaching new set of mortgage restrictions.
CAAMP supports its position above with data from 85,500 insured mortgages that funded in 2010, mostly high-ratio purchases or refinances.
Here is a sample of its findings:
- Assuming a 100 bps increase in fixed rates and a 250 bps hike in variable rates:
- Under 1% of mortgages would have a dangerously high TDS ratio (i.e., over 45%)
- This amounts to a scant 2,000-2,500 high-ratio borrowers among 13.4 million households, says CAAMP
- Only 2% of borrowers approved in 2010 would not be able to qualify with a 30-year amortization today
- 79% of borrowers have fixed rates and 21% have variable rates
- Incomes rise by 2.5% per year, offsetting much of the payment increases borrowers experience
- Each year about 2.5% to 3% of households are first-time buyers (350,000 to 400,000 people)
In sum, the “out of control” borrowers that housing critics have been warning about are a hairline fraction of the population.
Meanwhile, every other responsible low-risk borrower in the country now gets cash-flow management options (including longer amortizations and 90% LTV refinances) taken away.
By “low-risk,” we concede that 43 out of every 10,000 prime borrowers are behind on their mortgage by 90 days or more. That rate is at, or near, the lowest of any industrialized country. A 0.43% arrears rate is just 25 basis points from the lowest default rate of the past 20 years, and hardly indicative of any excesses.
Of course, arrears are a trailing indicator. So, go ahead and double them if you foresee high unemployment or another crisis on the way. (Arrears topped out at 0.45% in the last credit crisis). Either way, we’re still well below the highest Canadian prime default rate of the modern era (1.02% in 1983).
To exceed that level, we’d probably need extreme unemployment (remember, employment losses have the greatest correlation with mass arrears). Alternatively, we’d need a domestic economic crisis to substantially knock down home prices, putting hordes of people into negative equity scenarios. Funny enough, we just endured one of the worst global financial crises ever, and home prices went up.
The market’s biggest near-to-medium-term threat is probably rising rates. Depending on the extent, higher rates will put payments out of reach for a small fraction of the population. But, as CAAMP has shown, the huge majority of consumers can withstand sizable rate hikes.
As a side note, we would have liked to see CAAMP’s rate assumptions boosted another 1% (i.e., a 3.5% hike in prime and 2% increase in fixed rates). The current assumptions aren’t “worst case” enough. On the other hand, we doubt that rising rates alone would spark much more than a 1% default rate in any case—which would be considered a “controlled” rate by international standards.
As a parting note, it would have been interesting to see the data that policy makers used to justify these new restrictions. Unfortunately, the Finance Department doesn’t explain the logical details behind its mortgage policy. Its actions will have measureable economic consequences, but it chooses not to make Canadians privy to any quantifiable, default-related data that might support these sweeping changes.
If the government were confident in its research on this matter, it would make a clear case outlining the perceived risk factors with numerical evidence. Its case would necessarily have to explain why highly responsible borrowers “deserved” to have mortgage options eliminated along with the higher-risk borrowers.
In the absence of these explanations, we can’t help but wonder which prompted these particular rules more: real data, or good old backroom politics.
Rob McLister, CMT
I would keep my faith on those in Ottawa, atleast for now. The question is why did they act after the banks started talking about lower amortization?
We’ll never know what went on behind closed doors when Clark, Downe and the other bank bosses lobbied Flaherty for these rules. Make no mistake. These bankers are interested in one thing above all – their share price. You certainly didn’t see them pleading for new credit card rules.
This is rich
You ask for a survey from the people making the money to see if their customers can spend more, and call it real data.
Compare this versus the CHMC data that actually shows the amount they are insured for, and the government people watching this are scared.
Could you imagine the CAAMP actually saying anything but this… for gods sake they are a lobby group.
How about you get some actual professional accountants to agree with you…. unlikely.
It’s useful to see some actual data, and I’m also curious what information they used to make their decision. Then again, they’re trying to avoid raising rates. This change makes relatively little impact on people and does it’s job of talking the market down while allowing them to keep the stimulus on for other parts of the economy, and keeping the dollar from going even higher.
Anyoone saying the government over-reacted obviously doesn’t remember the early 80’s, when interest rates went sky-high, and it seemed like every other person was declaring bankruptcy because they couldn’t afford their mortgages when they came up for renewal.
They also didn’t learn anything from the USA when they had their melt-down, and people who were over-mortgaged lost their homes as well.
Not everyone understands how even 1/4% extra on their mortgage rate can affect their monthly payments. Many people will take on the debt, thinking they can cope with it, but not look 5 years down the road, when it’s entirely possible that they’ll have to remortgage at 10% or higher.
So, the conclusion here is that the Mortgage Brokers didn’t want restrictions on mortgages?
If 35-yr amortizations are such a small percentage of the market, why is there such an uproar over this change?
To me, I don’t understand why we are restricting mortgages, when credit cards are the problem. Why are we not putting more restrictions on how people are getting access to credit cards? That’s where people are overspending. People will spend more money than they make on on their credit cards, thus running into a negative cash flow situation. So, the government reduces the LTV amount to 85% so people can keep more of their high interest credit cards???? To me, that makes no sense. I can see from his point of view that maybe he sees the housing market declining and trying to protect people from being in a negative mortgage situation, but I believe it’s credit card companies that are killing us! Let’s restrict that instead!!!
Everyone who takes out a mortgage now is already benefiting from an unprecedented cash-flow management option – historically low interest rates. If they get close to 10% I would expect the government to loosen the rules and help home buyers.
Then they should call it what it is, a pseudo rate hike.
That isn’t how the government packaged these rules at all. Big brother says they are meant to “support the long-term stability of Canada’s housing market and support hard-working Canadian families.” The only people this applies to are debt addicts. Everyone else gets screwed by Flaherty micro-managing their personal budgets.
People need rule consistency so they can plan their finances. Our mortgage market is $1 trillion dollars and the government tinkers with it every year. We should have a reasonable set of rules and stick to them. Just my opinion.
2 other changes to CMHC rules that could help control risky/speculative mortgages, and get back to the goal of lowering borrowing costs for first-time home buyers:
1) Put a cap on the dollar amount that is allowed to be insured. I believe that there was a limit up until about 2003.
2) Only allow CMHC insurance on primary residences.
With respect, that conclusion would be mistaken. :)
The overwhelming majority of mortgage planners, us included, completely support the Finance Department in legislating materially risky borrowers out of the market.
The concern only relates to the simultaneous effect this has on responsible borrowers.
To reiterate what’s been said many times, strong borrowers pose no meaningful risk to the system. Yet, they are now losing important flexibility in terms of cash-flow management and interest-cost reduction. Only a minority of prudent borrowers will use this flexibility, but it’s nonetheless of great value to those who do.
Much of this boils down to the government’s role in its citizens’ personal finances. Where there is substantial risk, the government should eradicate it. But it should never–under any circumstances–eliminate economically-essential consumer choice for sensible Canadians…without incontrovertible evidence that it’s in the country’s best interest.
So Bruce let me get this straight. You’re saying these statistics are invalid because the mortgage industry compiled them from lender data?
How silly is that?? Who else is going to have this data besides the mortgage industry?
The bias appears to be on your part sir. It is very simpleminded to criticize an organization merely because it advocates for its own industry. We should instead judge the data itself. It’s either accurate or it’s not, and you seem to have no proof whatsoever that it’s not. If you have any better statistics to share, I’m all ears.
What CMHC data are you referring to by the way?
Thanks Rob – I agree with certain points, but I have to disagree with the point that “government doesn’t have the right to eliminate choice” when it comes to mortgage rules: since CMHC is the provider of the insurance, the Government can pose whatever rules it wants!
If CMHC were a private company, I’d see your point… but when it is a Government agency – it obviously will be regulated as the Government decides.
If the free market (without any taxpayer backing) was offering 35-year mortgage insurance, then you’d have a stronger argument.
At the risk of nuking the fridge here, I’ll echo Rob’s concerns about limiting economically valid choice and competition in the industry for responsible Canadians. I agree wholeheartedly that people should have as much information and choice available to them that the market is able to provide.
I’m reminded of some the early economics courses I took and the history of dying or rapidly changing industries. History is full of examples of incumbent companies – most often monopolies or oligopolies – that were struggling with the pace of change, new competition, and most importantly – changing consumer preferences and choice – who, in order to preserve or regain market share, turned NOT to the customer by being innovative, changing their practices, competing fairly, etc. – but to the government. The regulator. Their saviour. We can look to history to see dinosaurs like buggy whip manufacturers, coal, steel, telephone companies, etc. who resist change as long as possible through their lobbying efforts.
The good news is that even if the banks succeed in the short term in restricting choice and competition, hoarding information like it doesn’t want to be free, and trying to keep the consumer in the dark, they will ultimately fail like all their predecessors who tried before them.
Information is available. Consumers have more power and more choice. These trends are not reversible. They strike at the heart of traditional models and will continue to do so – forcing them to change, or be replaced.
What about that article a couple months ago that says x% (x a high number) of canadians won’t be able to afford the mortgage if the payment goes up by $y00 (y is a low number)?
And a related article saying z% would not be able to make the next mortgage payment if they lose their job?
In the recent housing meltdown in the US much was made about the lack of oversight by federal regulators,with merit,that allowed borrowers to be offered a wide range of mortgages that layered teaser rates, interest-only payment options, negative amortizations,100 percent plus financing and low-documentation requirements.
We all know the end result.
The tightening of the mortgage rules here has little to do with the statistics and every thing to do with politics.
Whether or not the numbers support the action is not the point.
This government wants Canadians to perceive that they are managing the industry to prevent any type of housing meltdown, regardless of how slight the risk, because its good politics.
And more importantly, that nothing happens on their watch that would cause a stain on their political legacy.
The phrase “flexibility in terms of cash-flow management” means 35-year amortizations with payments that are almost entirely interest (no principal). These mortgages are in nobody’s interest – even “responsible” borrowers.
If someone can’t afford a 25-year amortization, they are buying too much house and should scale back their purchase plans. The government acted responsibly here.
Why was this done, to benefit the big banks of course, who do you think was really pushing for this. With these new rules and the Banks registering collateral charges it will be near impossible for anyone to leave them. What rate do you think they will offer you when you come back in 5 years at 86% Ltv and you can’t qualify at 30 years with posted rates. They will totally screw you.
That is the issue and nothing else, it is a trap designed around debt fears. Buy bank stocks as there profits will soar.
What Gord said.
Actually Stats, the government decision doesn’t just affect the government organization. It dictates the products that two private companies are allowed to offer as well, Genworth and Canada Guarantee. Rob is correct on this that the government is limiting choice, whether they are right or wrong is another question.
I think everyone needs a reality check. The banks make LESS money on shorter amortizations, not more. Six years ago it was max 25 year am and max refinance of 80%. History indicates that we did just fine with those rules and we are not back to them yet. The broker industry is as much a culprit in inciting people to spend spend spend, after all we solicit refinance heavily and we do it to make money. Pot meet kettle.
I think it’s you that needs the reality check.
The banks are way more responsibile for spending than brokers. Banks sell far more mortgages, they give out unsecured LOCs like candy and they molest people with 24% interest on charge cards.
You don’t think that banks prospect like mad for refinancess? You don’t sound very unknowledgeable about the industry.
Banks will pull in even more profits on high interest consumer credit now that people can’t consolidate as much debt.
Agreed Gord. If anyone doubts that the banks lobbied for these changes out of self-interest, those doubts will be answered when banks release year-end earnings.
The government can make any rules it wants but we don’t elect officials to make UNECESSARY rules. Come election time, I urge people to remember how your government took valid mortgage options away from hard working taxpayers.
Jim, I never claimed that the banks are innocent in all of this. To make the claim that brokers play no part is however very naive. As for my experience in the it is well over 25 years.
Do the banks need to take accountability? Yes they do. Finger pointing is however unprofessionalism at it’s finest. If brokers are not prepared to take accountability for their own contribution they
lose credibility with the consumer. No one
wants to do business with a group that
vilifies others. Banks lend more true. But brokers account for 30% and that is not insignificant.
Fortunately we don’t live in the Socialist Republic of JS Ritchie.
Just who do you think you are? You feel it is your right to dictate how prudent citizens manage their finances or what house they buy?
I’ve never been late on a bill in 18 years and have an 812 credit score. If I prefer a 35 year amortization so I can invest my $150 of payment savings in something else, that is my business and not yours.
So if banks are as much responsible as brokers, credit unions, and others, then let’s stop wasting time blaming individual groups. If anyone is to blame for consumer overspending it is consumers themselves. They are the ones actually pulling the trigger and signing the credit contracts. Let’s not forget personal responsibility in all of this.
Do you think that if the data were pointing to a more negative and realistic outlook that CAAMP would attempt to paint such a picture? Or, is it in their best interests to tell everyone that our economic outlook is just fine despite what’s happened south of the border?
Wow – short memory!
The 30-yr, 35-yr, and (for a time) 40-yr options only existed because the same government introduced them in 2006… so, do you vote FOR them because of the 2006 loosening of mortgage rules, or AGAINST them because of the 2010-2011 tightening of mortgage rules?
Doesn’t the Government back the insurance for those 2 private companies also?
This site has pointed out that the Government backs 90% for the insurance provided through Genworth / Canada Guaranty:
If you consider that CMHC has 70%+ of the market (I think that stat is right?), the Government stands behind 97% of the entire market(all of CMHC’s 70% + 90% of the remaining 30%)
If the marginal buyers impacted by these changes really are low risk, we should expect to see non-government creditors quickly pick up the slack.
In fact, perhaps this is a great opportunity for some of you Canadian credit bulls to get into the niche lending business. Sieze the moment Flaherty has given you!
But if you can’t stomach the risk, ask yourself why you are defending low interest rate loans that you would never make with your own money?
I wonder if this is why Flaherty largely ignored the pleas of the RE lobby groups — because while they make lots of money off RE loans, they are not on the hook if the loans go bad.
If Flaherty’s objective was to reduce credit risk in Canada, he did the right thing by ignoring the biased stakeholders like CAAMP with no skin in the game.
“To me, I don’t understand why we are restricting mortgages, when credit cards are the problem.” – Steve OH
The government isn’t restricting anything. They are withdrawing an insurance offer to the banks. The banks are still free to offer what they want.
If the government gets involved with credit cards, then they are meddling in a contract to which they are not a party.
Lance2, if you uncomfortable with having the general public having a say in your finances, then I would suggest getting a mortgage that is not garaunteed by the general public.
the data is a survey… which is not really data, when you are talking about numbers. Could it hurt them to provide the actual real numbers (not a survey).
You are right, I have not seen the data, maybe you could find the raw data for me, and let me know where it is.
the CHMC data is also not available to us.
Furthermore, the mortgage brokers aren’t professionals, if you doubt this look up what a professional is, they are like professional hairdressers.
Professionals put the good of the public above themselves.
100% agree with Howdy. I would even go as far as to say that JS Ritchie has a right to voice his opinion, so Lance2, you don’t have to listen to JS Ritchie BUT the government DOES have the right to regulate the industry. You may not “like” how they regulate it and it may have been the right or wrong thing to do BUT the government has the right to do it. Enough with the self-righteous attitude – the industry is regulated in Canada so deal with it.
“Under 1% of mortgages would have a dangerously high TDS ratio (i.e., over 45%) ”
Here is one of the “statistic” by CAAMP that is a problem. The truth is that the TDS ratio calculation does not include a lot of costs that people HAVE to pay. That is why “condo fees” being included in the TDS ratio is such an interesting discusion. I would like to see how much a 1% (and 2% for that matter) increase in rates would result in mortgages over 40%. Try adding in the day care costs for families in their TDS and tell me how many would be over the 45% ratio with or WITHOUT the 1 to 2% rate increase. Statisically speaking, these things are not in the TDS BUT they are mandatory costs for many people and that is why this anaylsis is a bit misleading at the very least.
If Mortgage Brokers want to keep all options (ie. 35 year amortization) for non-risky buyers then I would say a re-definition of a “low-risk” buyers at the same time.
Actually Chrysler88, it’s not even about regulation. There are no regulations that say banks can’t lend for 35, 40 or 50 years. But the government won’t insure it.
Lance should get this government monkey off his back by getting a fully private mortgage. He would feel much better not having to worry about what the government will do next, and won’t have to worry about the opinions of others.
Wow many expressed a lot of my OPINIONS and many of them made sense.
I was watching to see if anyone mentioned a similar opinion on this topic but so far I haven’t seen it.
The spread between 30-35 year amortizations is not as great as the spread between 25-30 years and any money the banks might “lose” will be made up when clients no longer have the luxury of taking a longer amortization and the alternative is taking a 5 year discounted rate in order to qualify. What is it banks enjoy the most? Why a long term client they can sell other stuff to. The impact of any losses surely will be made up in longer term clients who they can build an “all round relationship” with. This is their gold… then they can feel free to sell clients their Lines of Credit , credit cards, overdraft protections, investments etc… The banks will not lose in this.If they dont get them that way well they can in penalties! Many clients will no longer have the freedom to choose a shorter term. Hopefully we as “Professional Brokers” have a good follow up action plan if we don’t already as 5 years is a long time to go without the day to day contact clients have with the banks. :)
To whomever spoke of the early 80’s I do indeed remember them. I worked for the TD Bank in Calgary at the time and we fondly referred to those days as “The Days of the Dollar Deals”.
The economy was totally different then and yes interest rates did rise astronomically however there seems to be no indication that this would have happened now or in the near future.
Also in those days people could simply assume a mortgage without qualifying as long as they had a sale agreement for min $1. That contributed heartily to the downfall. Last I heard in Alberta this is still possible. Yes, the current owners are on the hook until renewal time and can be”collected from” if the assuming party doesn’t pay.. but in my 30 years experience I have never seen that happen. Not even in the early 80’s. That doesn’t mean it didn’t happen just not in my experience.
I am in BC now and all assumptions must be qualified. We can’t compare the early 80’s to today in my humble opinion.
I must chuckle at whoever said that mortgages are guaranteed by the general public. I couldn’t seem to re find the post, but I wanted to know when the last time a member of the general public was asked about funding or foreclosure!, but perhaps that isn’t what was meant by that comment.
I’m grateful to CAAMP and also to Gary Mauris of Dominion Lending for finally having a voice in all the changes that have been thrust on Canada in this regard since Oct 15 2008.
The above are my opinions only.
Also the Government has already got their hot little hands into credit cards by imposing restrictions on them.. for those of you that haven’t heard the irritating ads on the radio about how the government has changes in store for them.
Onward and Upward!
What an ignorant statement.
This is a valuable compilation of statistics taken from a huge representative sample of actual mortgages. This is as valid a data set as one will find and there is no good reason to discredit the data or those who commissioned this research.
So many complain about the Gov’t involvement, even while taking the money the government doles out (either directly or indirectly via the value added of the CMHC insurance).
Most countries don’t have a CMHC or equivalent. So why does a country with such responsible citizens and prudent banks need the CMHC?
Let’s terminate the CMHC and see where that puts us.
how can it be ignorant statement if its true?
Thanks for the question. Canada is unequivocally blessed to have the lending and insurance system it does. CMHC provides tremendous value to Canadians and is the envy of governments throughout the world. If you do a search you’ll find that this topic has been covered on other CMHC-specific threads, so those would be the best forums to delve into this in detail. Suffice it to say, Canadians benefit in numerous ways via materially lower mortgage rates, added stability in the real estate and mortgage funding markets, added revenue to taxpayers, housing research and vital programs for low-income, rental, senior citizen, new immigrant, and self-employed borrowers…to name just a few ways.
It’s your site, and I don’t want to be an ungracious and argumentative guest. But it seems to me that our mortgage rates aren’t lower, and our housing prices are higher than most of those countries who don’t have a CMHC. I wonder, if the governments of the world envy us our CMHC, why haven’t they set up their own? Time will tell. But thank you for your reply.
It’s a totally fair and excellent question.
Government-backed default insurance mitigates lender and investor mortgage losses. As a result, the risk premiums are less and that keeps Canadian mortgage rates lower than they otherwise would be.
It’s tough to compare rates to other countries, though, because Canada’s base cost of funds are influenced by our macro economy.
For example, our bond yields (which impact fixed mortgage rates) trade at a premium to certain other countries, like the US. This premium has little to do with CMHC.
Moreover, you’ll find countries with lower rates (like the US) but much higher closing costs. Those closing costs offset some or all of their rate advantage. In the US you can get a 5-year fixed for 3.44%, 25 bps below a good 5-year rate in Canada. Yet, you’ll potentially pay thousands more to close.
Even more revealing is that 5-year Canada bonds trade at a 56 bps premium to 5-year US treasuries. So Canada’s 25 bps premium on 5-year fixed mortgages is much less than the theoretical funding cost difference would suggest. (I say theoretical because many lenders use short-term money to fund 5-year mortgages.)
In any event, CMHC’s model has received tremendous international exposure since 2008. It took the credit crisis for people to realize just how important CMHC’s liquidity can be. It’s prompted countries like Australia, with a robust real estate market of its own, to consider the implementation of its own government insurer.
I doubt they’re trying to paint an unrealistic picture. Stats are the stats – unless CAAMP is lying about the numbers. I can’t see them lying. How stupid would that be? It would be easy for those in the know to uncover the truth. I just think it’s really different in Canada and thank heavens it is.
I have a bridge to sell you at a great price. You can trust me about the price, because I did a survey and 9 out of 10 people who I asked said it was a great price. Stats are stats, and why would I lie?
So let me see if I get this straight:
a) 75% of the average Canadian household debt is in relatively low risk, low rate (say 4 or 5% average), long maturity (say 20 years or so average amortization) mortgages;
b) 25% is in high risk (either unsecured or secured by a car lien at a very high leverage rate – often past 100% of value once you drive it off the lot); high rate (up in the high 25%+ rate for some credit cards, but an average likely closely to 15% or so), short term (some credit cards/loans on the never never plan, but most loans with an effective amortization of 3 years or so).
Any prudent financial advisor would suggest using excess equity in the first group to pay off the second and if necessary stretch out the repayment schedule to match future income. And of course to reduce overall borrowing.
And our government does the opposite.
You bring nothing to the table with comments like that. CAAMP is a reputable organization and their data is closely scrutinized. Unless you have proof otherwise then save your mud-slinging for people who are dumb enough to believe it.
Mud slinging? I call it stating the obvious.
If lawyers do a survey about the legal profession, do you believe the results?
If a bank does a survey, and publishes the results, do you think that maybe, just maybe, they only release the results and the surveys that are favourable to their business?
Or how about if the police department does a survey of criminals about policy brutality, do you believe the results?
Proof? The onus is not on me to prove the validity of the CAAMP results. The onus is on the those doing the survey. And it is self evident that they are conflicted from objectivity.
For the record, it’s very common for trade associations to report statistics on their own industries. In many cases, industry associations are the authorities on the subject matter and the only ones with the data.
It’s better to look at the figures themselves and see if any contradicting data refutes it.
Barring that, no negative conclusions can be drawn about the objectivity of these statistics based solely on the source, which happens to be reputable in this case.
It was probably TD’s Ed Clark’s comments about losing market share if they impose debt restrictions! I think that comment was kinda funny, TD shareholders should pay close attention to Mr. Clark!
You guys need to stop the inane banter. You’re embarassing yourselves. Anyone with lending experience knows there is no good reason to take away 35 year amortizations from people with sound finances.
Uneducated critics have been duped into thinking 35 year amortizations are “risky.” What a farce. I defy anyone to demonstrate that qualified borrowers with 35 year amortizations present a real risk to housing. All of this is just government posturing at its finest.
BDavis, you wrote:
“Uneducated critics have been duped into thinking 35 year amortizations are “risky.” What a farce. I defy anyone to demonstrate that qualified borrowers with 35 year amortizations present a real risk to housing”
In answer to your question, the CMHC charges a risk premium for insuring a 35 year amortization. I trust this answers your question, and you will acknowledge that a longer amortization does indeed represent a “real risk”.
One can argue about the extent of the risk, but you must surely concede that the existence of the risk.
wjk – If you had the faintest idea of how to measure the “risk” you are fear mongering about, people might have respect for your point. I’ve seen you chatter here before and there is no substance behind your position. Please entertain us and frame this “risk” in terms of defaults and probabilities. It is so silly to crusade against something you really know nothing about.
The risk premium for the cancelled CMHC 35 yr amortization is 0.4% above that of a 20 yr amortizition.
This product was only provided from 2006-2011.
As per WJK’s point, if someone in the private sector wishes to provide this product, then there is nothing preventing them from doing so.
If you (or others) feel like this is a great product to provide, then you should pitch this to a private insurer.
For your reference, here are the premiums table at the CMHC:
Does that answer your question, or did I miss something?