By Mark Salerno
Did you know that you may be eligible for a 10 per cent refund on your Canada Mortgage and Housing Corporation (CMHC) mortgage insurance premium if you use CMHC insured financing to purchase, build, or renovate your home to make it energy efficient?
More than 17 per cent of the energy consumed in Canada is used to light, heat, and power homes. To help reduce home energy use - and help Canadian homeowners save money - CMHC has introduced a new initiative designed to make energy-efficient homes more affordable.
Under this new program, if you obtain a CMHC insured mortgage to buy or build an energy-efficient home, purchase a house and perform energy-saving renovations, or even renovate your existing home to make it more energy efficient, a 10 per cent refund on the mortgage insurance premium may be available. You could also have the added flexibility of extending your amortization (the period of time required to repay your mortgage) from 25 years to a maximum of 35 years if offered by your lender, thereby significantly reducing your monthly payments.
To qualify for the refund, you must first hire a qualified energy advisor to evaluate your new or existing home's energy efficiency using the EnerGuide for Houses rating system developed by Natural Resources Canada (NRCan). For a small fee, the advisor's evaluation will provide a complete breakdown of your home's energy consumption, rate its energy efficiency on a scale of 0-100, and give straightforward recommendations for improvements.
To qualify for the refund and extended amortization, the house must be either an energy-efficient R-2000 model or have an EnerGuide for Houses rating of 80 or higher. If you're planning to build a new home, an energy advisor can evaluate the building plans before the house is constructed.
If your house rates below 80 on the EnerGuide scale, you'll need to make some renovations as recommended in your energy advisor's report. These can range from installing a more energy-efficient furnace, to adding a higher-efficiency hot water heater, or even just carrying out some simple draft-proofing.
Then, talk to your lender or financial institution to discuss your options for arranging CMHC insured financing or re-financing of your mortgage.
After you make the changes recommended by your advisor, you'll need a second assessment to determine the energy-saving effectiveness of the renovations. To be eligible for the premium refund, the enhancements must result in an increase of at least five points on the EnerGuide scale, as well as achieve a minimum overall score of 40.
Once you've carried out the energy-efficient enhancements, you'll be amazed at the difference they make. In addition to the refund, the extended amortization, and even a potential NRCan grant, you'll also reduce your greenhouse gas emissions, protect the environment, and see some welcome reductions in your monthly utility bills!
The refund is also available to developers and owners of multi-unit residential properties. Eligibility requirements for new construction and retrofit of existing buildings differ.
Contact CMHC for specific program requirements. The Government of Canada actively promotes energy conservation and initiatives to reduce greenhouse gas emissions that contribute to climate change. To help bring about positive, lasting change, CMHC is working with Environment Canada and NRCan to inform Canadians of the benefits of programs such as the EnerGuide for Houses program, the One-Tonne Challenge, and Mortgage Loan Insurance for Energy-Efficient Homes.
For more information on the EnerGuide for Houses rating system or to find an energy advisor in your area, visit www.energuideforhouses.gc.ca or call 1-800-387-2000.
For more information about mortgage loan insurance and energy efficiency, read CMHC's online brochure entitled "Energy-Efficient Housing Made More Affordable with Mortgage Loan Insurance" on the CMHC website at www.cmhc.ca or call toll-free 1-800-668-2642.
Mark Salerno is CMHC's district manager for the GTA. CMHC is Canada's national housing agency and a source of objective, reliable housing expertise.