2014 CMHC Annual Report

Marci • May 7, 2015

This morning CMHC released it’s 2014 Annual Report… and they weren’t messing around. This is a comprehensive 130 page document that if you started to read right now, you might finish in time for the release of the 2015 report next year.

Now, just in case you have an appetite for government correspondence like this, I have included the report in it’s entirety below along with the official press release.

Bon appetit!

CMHC Releases Its 2014 Annual Report

OTTAWA, May 7, 2015 — Canada Mortgage and Housing Corporation (CMHC) today released its 2014 Annual Report.

“I’m very proud of what we accomplished in 2014,” said Evan Siddall, President and Chief Executive Officer. “Beginning with a new mission, to help Canadians meet their housing needs, we took steps in all our areas of business to ensure our operations are aligned with CMHC’s refocused approach, and to be a high-performing organization to provide the most value to Canadians.”

In keeping with the Corporation’s focus on housing needs and in support of the Government’s efforts to reduce taxpayer exposure to the housing sector, CMHC made important changes to its mortgage loan insurance and securitization business. This included premium and fee adjustments, changes to policies for low-ratio insurance, and the discontinuation of some products, including mortgage loan insurance for second homes and for the construction of multi-unit condominiums.

In 2014, CMHC’s total net income of $2.6 billion was provided for primarily by mortgage loan insurance and securitization activities. Total insurance-in-force, which represents the aggregate exposure of the mortgage loan insurance activity, stood at $543 billion as at December 31, 2014, down $14 billion from the beginning of the year. Over the past decade, CMHC has provided $21 billion toward improving the government’s fiscal position; $18 billion of this contribution was provided through the mortgage loan insurance activity.

CMHC’s strong underwriting practices and sound mortgage loan insurance portfolio are reflected in the 2014 results. Average credit scores at origination were 731 for transactional homeowner and 760 for portfolio, and the average borrower equity in CMHC’s insurance portfolio has remained stable at 46%. Other key figures show mortgage loan insurance claims paid during the year decreased by 4% from 2013 while the arrears rate remained relatively unchanged at 0.35%.

CMHC follows risk management practices as set out by the Office of the Superintendent of Financial Institutions.

In 2014, CMHC provided $117.6 billion in guarantees through its securitization programs. These guarantees help both small and large lenders access funds for residential mortgage lending, supporting competition in the mortgage market and contributing to the stability of the financial system. In 2014, CMHC also announced increases to its guarantee fees. This is an important step toward further reducing taxpayer exposure to the housing sector and encouraging the development of private market funding options.

The federal government, through CMHC, also provided investments of more than $2 billion for housing in 2014, including funding to support households living in existing social housing on and off reserve, and approximately $302 million in new commitments of affordable housing.

Throughout the year, CMHC worked with provinces and territories to extend bilateral Investment in Affordable Housing agreements to 2019, which included additional funding for Nunavut. From April 2011 to the end of December 2014, 217,772 households are no longer in housing need as a result of this funding.

CMHC provides objective housing research and advice to Canadian governments, consumers and the housing industry. In 2014, it continued to improve the availability of information on the housing market through reports such as CMHC’s Insurance Business Supplement and tools like the Housing Market Information Portal and the House Price Analysis and Assessment Framework.

CMHC’s 2014 Annual Report is available online at www.cmhc.ca/annualreport or by calling 1-800-668-2642.

CMHC helps Canadians meet their housing needs. As Canada’s authority on housing, we contribute to the stability of the housing market and financial system, provide support for Canadians in housing need, and offer objective housing research and advice to Canadian governments, consumers and the housing industry. Prudent risk management, strong corporate governance and transparency are cornerstones of our operations.

Follow CMHC on Twitter @CMHC_ca

Media inquiries:

Charles Sauriol
CMHC Media Relations
613-748-2799
csauriol@cmhc-schl.gc.ca

Annual Report Highlights — CMHC in 2014

Financial Highlights
Total Assets ($M) 248,490
Total Liabilities ($M) 230,308
Total Equity ($M) 18,182
Net Income ($M) 2,625
Assisted Housing
Amount provided by the federal government through CMHC for housing programs ($M) 2,010
Mortgage Loan Insurance
Number of units insured 308,820
Insurance-in-force ($B) 543
Average equity in CMHC’s insured transactional homeowner and portfolio (per cent) 46
Average credit score at origination for CMHC’s transactional homeowner loans insured in 2014 745
Average outstanding loan amount ($) 139,221
Securitization
Total guarantees-in-force ($B) 422
Annual securities guaranteed ($M) 117,643

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How Payment Frequency Impacts Mortgage Financing

By Marci Deane • August 13, 2025
You’ve most likely heard that there are two certainties in life; death and taxes. Well, as it relates to your mortgage, the single certainty is that you will pay back what you borrow, plus interest. With that said, the frequency of how often you make payments to the lender is somewhat up to you! The following looks at the different types of payment frequencies and how they impact your mortgage. Here are the six payment frequency types Monthly payments – 12 payments per year Semi-Monthly payments – 24 payments per year Bi-weekly payments – 26 payments per year Weekly payments – 52 payments per year Accelerated bi-weekly payments – 26 payments per year Accelerated weekly payments – 52 payments per year Options one through four are straightforward and designed to match your payment frequency with your employer. So if you get paid monthly, it makes sense to arrange your mortgage payments to come out a few days after payday. If you get paid every second Friday, it might make sense to have your mortgage payments match your payday. However, options five and six have that word accelerated before the payment frequency. Accelerated bi-weekly and accelerated weekly payments accelerate how fast you pay down your mortgage. Choosing the accelerated option allows you to lower your overall cost of borrowing on autopilot. Here’s how it works. With the accelerated bi-weekly payment frequency, you make 26 payments in the year. Instead of dividing the total annual payment by 26 payments, you divide the total yearly payment by 24 payments as if you set the payments as semi-monthly. Then you make 26 payments on the bi-weekly frequency at the higher amount. So let’s use a $1000 payment as the example: Monthly payments formula: $1000/1 with 12 payments per year. A payment of $1000 is made once per month for a total of $12,000 paid per year. Semi-monthly formula: $1000/2 with 24 payments per year. A payment of $500 is paid twice per month for a total of $12,000 paid per year. Bi-weekly formula: $1000 x 12 / 26 with 26 payments per year. A payment of $461.54 is made every second week for a total of $12,000 paid per year. Accelerated bi-weekly formula: $1000/2 with 26 payments per year. A payment of $500 is made every second week for a total of $13,000 paid per year. You see, by making the accelerated bi-weekly payments, it’s like you end up making two extra payments each year. By making a higher payment amount, you reduce your mortgage principal, which saves interest on the entire life of your mortgage. The payments for accelerated weekly payments work the same way. It’s just that you’d be making 52 payments a year instead of 26. By choosing an accelerated option for your payment frequency, you lower the overall cost of borrowing by making small extra payments as part of your regular payment schedule. Now, exactly how much you’ll save over the life of your mortgage is hard to nail down. Calculations are hard to do because of the many variables; mortgages come with different amortization periods and terms with varying interest rates along the way. However, an accelerated bi-weekly payment schedule could reduce your amortization by up to three years if maintained throughout the life of your mortgage. If you’d like to look at some of the numbers as they relate to you and your mortgage, please don’t hesitate to connect anytime; it would be a pleasure to work with you.

Mortgage Options At Renewal

By Marci Deane • August 6, 2025
It’s a commonly held belief that if you’ve made your mortgage payments on time throughout the entirety of your mortgage term, that the lender is somehow obligated to renew your mortgage. The truth is, a lender is never under any obligation to renew your mortgage. When you sign a mortgage contract, the lender draws it up for a defined time, so when that term comes to an end, the lender has every right to call the loan. Now, granted, most lenders are happy to renew your mortgage, but several factors could come into play to prevent this from happening, including the following: You’ve missed mortgage payments over the term. The lender becomes aware that you’ve recently claimed bankruptcy. The lender becomes aware that you’re going through a separation or divorce. The lender becomes aware that you lost your job. Someone on the initial mortgage contract has passed away. The lender no longer likes the economic climate and/or geographic location of your property. The lender is no longer licensed to lend money in Canada. Again, while most lenders are happy to renew your mortgage at the end of the term, you need to understand that they are not under any obligation to do so. So how do you protect yourself? Well, the first plan of action is to get out in front of things. At least 120 days before your mortgage term expires, you should be speaking with an independent mortgage professional to discuss all of your options. By giving yourself this lead time and seeking professional advice, you put yourself in the best position to proactively look at all your options and decide what’s best for you. When assessing your options at the time of renewal, even if the lender offers you a mortgage renewal, staying with your current lender is just one of the options you have. Just because your current lender was the best option when you got your mortgage doesn’t mean they are still the best option this time around. The goal is to assess all your options and choose the one that lowers your overall cost of borrowing. It’s never a good idea to sign a mortgage renewal without looking at all your options. Also, dealing with an independent mortgage professional instead of directly with the lender ensures you have someone working for you, on your team, instead of seeking guidance from someone with the lender’s best interest in mind. So if you have a mortgage that’s up for renewal, whether you’re being offered a renewal or not, the best plan of action is to protect yourself by working with an independent mortgage professional. Please connect anytime; it would be a pleasure to work with you!

Bank of Canada Rate Announcement Jul 30th, 2025

By Marci Deane • July 30, 2025
Bank of Canada holds policy rate at 2¾%. FOR IMMEDIATE RELEASE Media Relations Ottawa, Ontario July 30, 2025 The Bank of Canada today maintained its target for the overnight rate at 2.75%, with the Bank Rate at 3% and the deposit rate at 2.70%. While some elements of US trade policy have started to become more concrete in recent weeks, trade negotiations are fluid, threats of new sectoral tariffs continue, and US trade actions remain unpredictable. Against this backdrop, the July Monetary Policy Report (MPR) does not present conventional base case projections for GDP growth and inflation in Canada and globally. Instead, it presents a current tariff scenario based on tariffs in place or agreed as of July 27, and two alternative scenarios—one with an escalation and another with a de-escalation of tariffs. While US tariffs have created volatility in global trade, the global economy has been reasonably resilient. In the United States, the pace of growth moderated in the first half of 2025, but the labour market has remained solid. US CPI inflation ticked up in June with some evidence that tariffs are starting to be passed on to consumer prices. The euro area economy grew modestly in the first half of the year. In China, the decline in exports to the United States has been largely offset by an increase in exports to the rest of the world. Global oil prices are close to their levels in April despite some volatility. Global equity markets have risen, and corporate credit spreads have narrowed. Longer-term government bond yields have moved up. Canada’s exchange rate has appreciated against a broadly weaker US dollar. The current tariff scenario has global growth slowing modestly to around 2½% by the end of 2025 before returning to around 3% over 2026 and 2027. In Canada, US tariffs are disrupting trade but overall, the economy is showing some resilience so far. After robust growth in the first quarter of 2025 due to a pull-forward in exports to get ahead of tariffs, GDP likely declined by about 1.5% in the second quarter. This contraction is mostly due to a sharp reversal in exports following the pull-forward, as well as lower US demand for Canadian goods due to tariffs. Growth in business and household spending is being restrained by uncertainty. Labour market conditions have weakened in sectors affected by trade, but employment has held up in other parts of the economy. The unemployment rate has moved up gradually since the beginning of the year to 6.9% in June and wage growth has continued to ease. A number of economic indicators suggest excess supply in the economy has increased since January. In the current tariff scenario, after contracting in the second quarter, GDP growth picks up to about 1% in the second half of this year as exports stabilize and household spending increases gradually. In this scenario, economic slack persists in 2026 and diminishes as growth picks up to close to 2% in 2027. In the de-escalation scenario, economic growth rebounds faster, while in the escalation scenario, the economy contracts through the rest of this year. CPI inflation was 1.9% in June, up slightly from the previous month. Excluding taxes, inflation rose to 2.5% in June, up from around 2% in the second half of last year. This largely reflects an increase in non-energy goods prices. High shelter price inflation remains the main contributor to overall inflation, but it continues to ease. Based on a range of indicators, underlying inflation is assessed to be around 2½%. In the current tariff scenario, total inflation stays close to 2% over the scenario horizon as the upward and downward pressures on inflation roughly offset. There are risks around this inflation scenario. As the alternative scenarios illustrate, lower tariffs would reduce the direct upward pressure on inflation and higher tariffs would increase it. In addition, many businesses are reporting costs related to sourcing new suppliers and developing new markets. These costs could add upward pressure to consumer prices. With still high uncertainty, the Canadian economy showing some resilience, and ongoing pressures on underlying inflation, Governing Council decided to hold the policy interest rate unchanged. We will continue to assess the timing and strength of both the downward pressures on inflation from a weaker economy and the upward pressures on inflation from higher costs related to tariffs and the reconfiguration of trade. If a weakening economy puts further downward pressure on inflation and the upward price pressures from the trade disruptions are contained, there may be a need for a reduction in the policy interest rate. Governing Council is proceeding carefully, with particular attention to the risks and uncertainties facing the Canadian economy. These include: the extent to which higher US tariffs reduce demand for Canadian exports; how much this spills over into business investment, employment and household spending; how much and how quickly cost increases from tariffs and trade disruptions are passed on to consumer prices; and how inflation expectations evolve. We are focused on ensuring that Canadians continue to have confidence in price stability through this period of global upheaval. We will support economic growth while ensuring inflation remains well controlled. Information note The next scheduled date for announcing the overnight rate target is September 17, 2025. Read the July 30th., 2025 Monetary Report