cmhc posts

In an attempt to curtail rising household debt, the Federal government has announced a second major tightening of mortgage lending rules -- a change that could affect up to 20,000 new mortgages and cause house prices to fall in the short-term.

According to media reports, Finance Minister Jim Flaherty said Monday that three main changes would be made to the mortgage rules: mortgages with amortization periods greater than 30 years will no longer qualify for government-backed mortgage insurance, down from 35 years; the refinance limit on a mortgage will be reduced to 85 per cent of the home's value, down from 90 per cent; and Ottawa will no longer insure home equity lines of credit (HELOC).