CMHC mortgage insurance reduction will cost $1.4 billion over five fiscal years

The Parliamentary Budget Officer (PBO) today released his fiscal analysis of the Government’s proposal to reduce mortgage insurance premiums charged by the Canada Mortgage and Housing Corporation (CMHC).

“We estimate that the 25% decrease in CMHC’s mortgage insurance premiums will result in a net cost of $1.4 billion to the government over five years”, says Yves Giroux, PBO.

PBO also estimates that Canadian households will have a one-time average savings of $5,341 in 2022-2023.

If implemented, it is also expected that private sector insurers will also reduce their premiums to closely match those of the CMHC, given the structure of the mortgage insurance market.