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CANADA MORTGAGE AND HOUSING CORPORATION

CMHC Portability

15 minutes | 0.25 CE | Highlight Sheet (PDF)*
*Viewing of all materials is required to claim your CE credit.

CMHC Portability

Introduction Slide

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(Visual) Text: The CLASSROOM for Mortgage Professionals. Free training and webinars to expand your expertise

Slide 1

(Visual) Header Text: Canada Mortgage and Housing Corporation, Mortgage Loan Insurance

(Visual) Title: CMHC Portability

(Visual) Footer: Everything you need to open new doors, Canada Mortgage and Housing Corporation Logo with Home to Canadians tagline and Canada Wordmark

CMHC helps Mortgage Professionals become trusted advisors to their clients throughout the home-buying and home-ownership experience.

One way we do this, is by offering a variety of innovative mortgage loan insurance products to help you meet your client’s home financing needs.

This presentation provides you with information on CMHC Portability, including an overview of the product features and eligibility requirements.

Slide 2

(Visual) Header Text: CMHC Portability

(Visual) Footer: www.Everythingyouneed.ca and Canada Mortgage and Housing Corporation Logo with Home to Canadians tagline is used throughout the presentation

Relocating is often a reality for many Canadians.

Whether moving to take advantage of employment opportunities, upsizing to accommodate an expanding family or choosing to downsize, your clients will be turning to you for advice on home financing.

Let’s look at how insuring your client’s mortgage with CMHC today, can give your customer financing flexibility and options in the future.

Slide 3

(Visual) Header Text: CMHC Portability

(Visual) Subtitle Text: What is CMHC Portability?

CMHC Portability is designed to complement a Lender’s internal portability policies by allowing borrowers to port the CMHC mortgage loan insurance from their current home when they sell it and finance the purchase of their next home.

In some cases, Portability allows repeat users of CMHC residential mortgage loan insurance to save money by reducing or eliminating the premium on the purchase of a subsequent home.

Slide 4

(Visual) Header Text: CMHC Portability

(Visual) Subtitle Text: Eligible Products

CMHC Portability is available for all CMHC-insured mortgage loans covering 1 – 4 unit properties originally insured through emili.

The borrowers on the new application must be the same borrowers as on the original approved application.

CMHC homeowner mortgage loan insurance is available to a maximum of one property per borrower or co-borrower at any given time.

Slide 5

(Visual) Header Text: CMHC Portability

(Visual) Subtitle Text: Features

Your clients may have varying financing needs when they choose to relocate.

With CMHC Portability, you can offer your clients two cost effective options that will facilitate the porting of their mortgage from one home to another home.

Let’s look at each of these options and the potential premium savings that you can offer your clients.

Note that the maximum purchase price or as-improved property value for Portability-with-Increase loans must be below $1,000,000.

Slide 6

(Visual) Header Text: CMHC Portability

(Visual) Subtitle Text: Straight Portability

CMHC’s Straight Portability option is suitable for your clients who wish to maintain or reduce their existing mortgage balance, maintain or reduce the remaining amortization, and maintain or reduce the current loan-to-value ratio when porting their current mortgage loan to their next home.

One of the most significant features of this option is that no new or additional mortgage loan insurance premium is payable when the borrower ports the terms and conditions of the mortgage loan on their current home to the mortgage loan on their next home.

Slide 7

(Visual) Header Text: CMHC Portability

(Visual) Subtitle Text: Portability-with-Increase

The Portability-with-Increase option can be offered to your clients when there is an increase to the loan amount, amortization period and/or the loan-to-value ratio of the new mortgage loan. A premium is payable with this option however, a premium credit may be available under certain circumstances.

Slide 8

(Visual) Header Text: CMHC Portability – Applicable Premiums

This table details the applicable mortgage loan insurance premiums for CMHC Portability-with-Increase.

If your client requires additional financing when porting their mortgage loan, the premium payable is the lesser of the “Premium on the Total Loan Amount” or the “Premium on the Increase to the Loan Amount”.

Where there is a port with a loan increase, the amortization period of the existing CMHC-insured loan and the loan increase may be blended using a weighted average provided the resulting amortization does not exceed the lesser of 25 years or the remaining economic life of the property. If the blended amortization is greater than the amortization on the existing mortgage loan, a 0.60% blended amortization surcharge applies to the premium on the increased loan amount.

Next, let’s look at how you may be able to offer your client a premium credit.

(Visual): A table shows the applicable mortgage loan insurance premiums for CMHC Portability-with-Increase based on applicable loan-to-value ratios, as follows:

  • For loan-to-value ratios of up to and including 85%, the premium on the total loan amount is 1.80%
  • For loan-to-value ratios of up to and including 85%, the premium on the increase to loan amount for Portability is 4.00%
  • For loan-to-value ratios of up to and including 90%, the premium on the total loan amount is 2.40%
  • For loan-to-value ratios of up to and including 90%, the premium on the increase to loan amount for Portability is 4.90%
  • For loan-to-value ratios of up to and including 95% for traditional down payment, the premium on the total loan amount is 3.60%
  • For loan-to-value ratios of up to and including 95% for traditional down payment, the premium on the increase to loan amount for Portability is 5.65%
  • For loan-to-value ratios of up to and including 95% for non-traditional down payment, the premium on the total loan amount is 3.85%
  • For loan-to-value ratios of up to and including 95% for non-traditional down payment, the premium on the increase to loan amount for Portability is not applicable.  

The table also notes that a surcharge for blended amortization is 0.60% and the premium is higher for non-traditional down payments on Increase to Loan Amount.

Slide 9

(Visual) Header Text: CMHC Portability – Premium Credit Schedule

To be eligible for a premium credit, the existing CMHC-insured loan must be transferred to the borrower’s next home. In addition, the closing date of the original insured loan and the date on which the application for the new loan is submitted for CMHC insurance, must be within two years.

The amount of the premium credit depends on the elapsed time since the closing date of the original CMHC-insured loan. The shorter the period of time elapsed, the greater the amount of the premium credit.

For example, if the borrower ports their mortgage within six months, they may be eligible for a 100 percent premium credit.

If the borrower is porting their mortgage within twelve months, they may be eligible for a 50 percent premium credit.

If your client is porting their mortgage within twenty-four months, they may be eligible for a 25 percent premium credit.

Mortgage loan insurance is portable beyond two years, however a premium credit will not apply.

Slide 10

(Visual) Header Text: CMHC Green Home

(Visual) Subtitle Text: Energy-efficiency is top of mind for your clients

Energy-efficiency is top of mind for your clients.

CMHC can help to make energy-efficient housing choices more affordable for your clients by offering mortgage loan insurance premium refunds for homeowners who purchase an energy-efficient home or make energy-saving renovations to an existing home.

To learn more, visit www.everythingyouneed.ca or ask your CMHC Business Development Representative about CMHC Green Home.

Slide 11

(Visual) Header Text: CMHC Portability

(Visual) Subtitle Text: Benefits for Mortgage Professionals

Let’s recap some of the benefits of choosing CMHC-insured financing, as it relates to you, the Mortgage Professional.

With CMHC mortgage loan insurance, you can meet your client’s home financing needs today and offer savings by reducing or eliminating the premium when they choose to relocate and port a CMHC-insured loan.

You can work with confidence knowing that CMHC-insured products support your efforts to meet the financial goals of your clients throughout their home-buying and home-ownership experience.

Let CMHC help you manage your business, encourage customer retention and build long-term client relationships.

Slide 12

(Visual) Header Text: CMHC’s Underwriting Centre

CMHC’s Underwriting Centre is backed by the experience gained from millions of transactions approved through emili – CMHC’s on-line mortgage loan insurance decisioning system.

Our dedicated team of emili Professionals is committed to providing you with extended hours of service and national expertise with a local perspective.

Whether you have a mortgage loan insurance question, are seeking policy information or simply need help submitting an application, an emili Professional is able to provide you with the answers you need.

Simply contact CMHC’s Underwriting Centre at 1-888 GO emili, that’s 1-888-463-6454 to instantly connect to an emili Professional.

Our hours of service are Monday to Friday from 6:30 a.m. to 11:00 p.m. and Saturdays from 8:30 a.m. to 7:00 p.m. All hours are Eastern Time.

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For more than 65 years, CMHC has shared a wealth of knowledge, housing expertise, tools and guidance to help Mortgage Professionals stay informed and become trusted advisors to their clients.

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CMHC. Everything you need to open new doors

Slide 15

(Visual) Canada Mortgage and Housing Corporation Logo with Home to Canadians tagline

(Visual) Disclaimer: CMHC is making the information contained in this presentation available for general information purposes only. It is intended to provide highlights of CMHC products to assist Approved Lenders in understanding CMHC’s current requirements. Lenders using the information should be aware that other conditions, requirements and restrictions may apply and that the information is subject to change without notice. The information is provided without warranty and it is not intended that Lenders or other readers will rely on this information without verifying the full terms of CMHC underwriting policies.

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