CMHC is Canada’s largest mortgage default insurer and its Corporate Plan Summary has a load of data about how it operates.
On average, CMHC insures people with good credit, good equity, modest mortgage amounts and traditional (~25-year) amortizations.
Here are other highlights…
General Market Data
- CMHC forecasts that it will insure 706,664 mortgages this year, down 15% from its expected volumes in 2010, and down 33% from 2009.
- Large multi-unit properties and rural/smaller markets comprise almost 40% of CMHC’s high-ratio insurance business.
- CMHC insurance distribution by province:
- Ontario: 44%
- B.C.: 16%
- Alberta: 15%
- Quebec: 16%
- Other provinces/Territories: 9%
Arrears
- Arrears rates on CMHC-insured mortgages are in-line with industry trends as reported by the CBA.
- As employment levels continue to improve, CMHC expects its already low arrears to moderate throughout 2011.
Amortization and Terms
- The average amortization period for all CMHC-insured homeowner loans at initiation is 24 years.
- The average amortization period for CMHC-insured rental mortgages is 25 years.
- The ratio of mortgages with terms over three years: 82%
Credit Quality
- Average credit score of CMHC-insured borrowers in 2009: 718 (the range is 300-900)
- Only 5% of CMHC-insured borrowers have no score or a score less than 600
- 69% have scores over 700
- 25% have scores from 600 to 699
Value and Equity
- Only 10% of CMHC insured properties have a value over $400,000
- The average CMHC-insured homeowner has a $151,630 mortgage balance
- 87% of CMHC insured mortgages have a loan-to-value under 90%
- Average equity of a CMHC-insured borrower: 46%
Other
- 50% of CMHC-insured high-ratio borrowers accelerate their mortgage payments
- CMHC plans to guarantee $20 billion in NHA MBS in 2011, and $32 billion in Canada Mortgage Bonds
Rob McLister, CMT