CMHC to stop insuring mortgages on million-dollar homes, condo construction

OTTAWA – Canada Mortgage and Housing Corp. says it will no longer offer mortgage insurance for homes that cost $1 million or more, starting July 31, even if the buyer has made a deposit of 20 per cent or more.

It’s a step further than rules introduced two years ago when then finance minister Jim Flaherty announced that CMHC would stop insuring mortgages on homes worth $1 million or more if the buyer borrowed more than 80 per cent of the value.

The Crown corporation says the changes announced Friday would have affected only about three per cent of the mortgage insurance it provided last year for individual homes.

CMHC also announced it will no longer insure loans that are used to finance construction of multi-unit condominium projects, effective immediately.

It says that type of insurance product was introduced in 2010, but CMHC hasn’t provided any to builders since 2011.

CMHC also says its mortgage loan insurance for condo buyers isn’t affected by the change.