CMHC to limit mortgage insurance product offerings

Canada Mortgage and Housing Corporationwill no longer offermortgage insurance onsecond homes, the crown corporation said on Friday.

It will also discontinue selling mortgage insurance to self-employed people without third-party incomevalidation.

The new limitations mean borrowers will also no longer be able to act as co-borrowers on other applications.

These changes, which willtake effect on May 30, are part of the ongoing review of the mortgage loan insurance business.

• Home buyers face higher mortgage insurance costs next week
• CMHC hikes mortgage insurance premiums

CMHC said self-employed Canadians can still qualify forinsured financingwith a validation of their income using traditional methods.

As well, the two productswill still be available to those who submit requests prior to May 30, regardless of the closing date of the home purchase.

CMHC said these two products account for less than three per cent of its insured business volumes in units.

"Given the limited use of these products, their discontinuation is not expected to have a material impact on the housing market," CMHCsaid in its release.

The changescomeas Canadian home buyers face an increasein mortgage insurance premiums.

In February, CMHC announced it would hike premiums for default insurance by an average of 15 per cent effective May 1.

The increase would hit buyers who have a downpayment of less than 20 per cent.