OTTAWA, Jan. 17 (UPI) -- With Canadian consumer debt exceeding incomes, Finance Minister Jim Flaherty announced a scale-back of federal mortgage lending rules Monday.
The Conservative minister said at an Ottawa news conference the government, after March, would no longer insure mortgages amortized over 35 years. He said the maximum insurable term would be 30 years.
Federal insurance is mandatory for property buyers with less than a 20 percent down payment. The minimum down payment of 5 percent is unchanged, the Financial Post said.
Flaherty said the government would phase-out backing consumer home equity lines of credit in a bid to rein in consumer debt.
He said the government was also lowering the amount of mortgage loans homeowners could take to 85 percent of the home's value from 90 percent, the Post said.
"Canada's well-regulated housing sector has been an important strength that allowed us to avoid the mistakes of other countries," Flaherty said. He said the goal was to encourage "hard-working Canadian families to save by investing in their homes and future."
