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CMHC’s securitization programs support financial stability by providing lenders with reliable mortgage funding throughout the business cycle.
Limits on the amount of new guarantees are set annually by the Minister of Finance and are an important oversight mechanism to manage housing market risks and the Government’s exposure to the housing sector. These limits are separate and distinct from the $750 billion limit on mortgage insurance-in-force, which has been increased by $150 billion in support of the federal government’s response to financial market pressures related to the COVID-19 pandemic and will be in effect up to and including March 24, 2025. The limit on mortgage insurance-in-force will revert back to $600 billion effective March 25, 2025.
Annual Limits for 2020
For 2020, the Minister of Finance has authorized CMHC to provide up to $295 billion of new guarantees of market NHA MBS and up to $60 billion of new guarantees for CMB with the ability to increase issuance should market conditions and investor demand warrant. This limit excludes NHA MBS issuance as reinvestment assets for CMB series issued before June 30, 2016.
Canadian lenders continue to benefit from access to diverse and stable funding options, including deposits from customers, capital markets such as CMHC-sponsored securitization, the Canadian Covered Bond Program and other corporate debt.
Guarantee Fees
CMHC guarantees the timely payment of interest and principal for NHA MBS enabling approved financial institutions to pool eligible mortgages into marketable securities that can be sold to investors. CMHC charges issuers a fee to compensate for the guarantee it provides.
In support of the federal government’s response to financial market pressures related to the COVID-19 pandemic, CMHC will postpone the planned changes to the NHA MBS guarantee fees that were scheduled to become effective on July 1, 2020. The guarantee fee changes communicated in Advice 7 – Update to the NHA MBS Guarantee Fees and 2020 Limit for New Guarantees of Market NHA MBS will take effect on January 1, 2021 and apply to NHA MBS guaranteed on or after that date.
For the period from January 1, 2020 to December 31, 2020 there is no change to guarantee fees for NHA MBS.
For the period from January 1, 2021 to December 31, 2021, guarantee fees will be adjusted from current levels as follows:
| Term of NHA MBS | Prior to January 1, 2021 | |
|---|---|---|
| Fee Payable NHA MBS Guarantees <= $9B | Fee Payable NHA MBS Guarantees > $9B | |
| 1 month to 6 months | 0.05% | 0.16% |
| 7 months to 1 year 6 months | 0.10% | 0.33% |
| 1 year 7 months to 2 years 6 months | 0.15% | 0.50% |
| 2 years 7 months to 3 years 6 months | 0.21% | 0.70% |
| 3 years 7 months to 4 years 6 months | 0.26% | 0.85% |
| 4 years 7 months to 5 years 6 months | 0.30% | 1.00% |
| 5 years 7 months to 6 years 6 months | 0.35% | 1.15% |
| 6 years 7 months to 7 years 6 months | 0.39% | 1.30% |
| 7 years 7 months to 8 years 6 months | 0.44% | 1.45% |
| 8 years 7 months to 9 years 6 months | 0.48% | 1.60% |
| 9 years 7 months to 10 years 6 months | 0.53% | 1.75% |
| 10 years 7 months to 11 years 6 months | 0.56% | 1.85% |
| 11 years 7 months to 12 years 6 months | 0.59% | 1.95% |
| 12 years 7 months to 13 years 6 months | 0.62% | 2.05% |
| 13 years 7 months to 14 years 6 months | 0.65% | 2.15% |
| Above 14 years 6 months | 0.68% | 2.25% |
| Term of NHA MBS | On or after January 1, 2021 | ||
|---|---|---|---|
| Affordability-linked Pools | Other NHA MBS Pools | ||
| Fee Payable NHA MBS Guarantees <= $9B* | Fee Payable NHA MBS Guarantees > $9B* | ||
| 1 month to 6 months | 0.05% | 0.08% | 0.22% |
| 7 months to 1 year 6 months | 0.10% | 0.17% | 0.46% |
| 1 year 7 months to 2 years 6 months | 0.15% | 0.25% | 0.70% |
| 2 years 7 months to 3 years 6 months | 0.21% | 0.35% | 0.98% |
| 3 years 7 months to 4 years 6 months | 0.26% | 0.43% | 1.19% |
| 4 years 7 months to 5 years 6 months | 0.30% | 0.50% | 1.40% |
| 5 years 7 months to 6 years 6 months | 0.35% | 0.58% | 1.61% |
| 6 years 7 months to 7 years 6 months | 0.39% | 0.65% | 1.82% |
| 7 years 7 months to 8 years 6 months | 0.44% | 0.73% | 2.03% |
| 8 years 7 months to 9 years 6 months | 0.48% | 0.80% | 2.24% |
| 9 years 7 months to 10 years 6 months | 0.53% | 0.88% | 2.45% |
| 10 years 7 months to 11 years 6 months | 0.56% | 0.93% | 2.59% |
| 11 years 7 months to 12 years 6 months | 0.59% | 0.98% | 2.73% |
| 12 years 7 months to 13 years 6 months | 0.62% | 1.03% | 2.87% |
| 13 years 7 months to 14 years 6 months | 0.65% | 1.08% | 3.01% |
| Above 14 years 6 months | 0.68% | 1.13% | 3.15% |
Affordability-linked pools include social housing pools and multi-family pools with a minimum 20% of the issued amount represented by eligible multi-family loans insured under the CMHC Affordability Mortgage Loan Insurance (MLI) Flex product.
Affordability-linked pools guaranteed on or after January 1, 2021 will be excluded from an issuer’s annual NHA MBS guarantees when assessing against the annual guarantee threshold of $9 billion for higher tier pricing.
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