PST on CMHC premiums
We have all heard about new addition to 6% PST charges on insurance but many have not been aware that will also apply to Mortgage loan insurance premiums. Currently CMHC, Genworth and Canada Guaranty Insurance Premiums fees are charged and the cost is put into your mortgage, but this new PST tax charge will need to be paid as part of your closing costs.
The Saskatchewan PST will be payable on premiums paid for all mortgage loan insurance transactions. The provincial sales tax cannot be added to the loan amount.
What does this mean for YOUR Mortgage? The PST on the Insurance Premium will be the responsibility of the client to pay.
Example:
Purchase $350,000.00
Minimum 5% downpayment $17,500.00 =$332,500.00
+CMHC premium $13,300.00 (4% surcharge/minimum 5% down)
=Total mortgage $345,800.00