Canada's Conservative government Thursday announced a tightening of federal mortgage rules in response to the federal bank's concern over rising consumer debt.
Finance Minister Jim Flaherty announced several measures at an Ottawa news conference that will put an end to federally insured 30-year mortgages and limit how much homeowners can borrow against their properties, the Canadian Broadcasting Corp. reported.
Effective July 9, the maximum insurable mortgage period is being reined back to the long-traditional 25-year term, Flaherty said.
A second step to curb debt is the lowering of how much property owners can borrow against their equity or for refinancing, down to 80 percent from 85 percent, the Globe and Mail said.
Flaherty also said the Canadian Mortgage and Housing Corp. that regulates and insures housing debt, won't cover mortgages of more than $1 million.
"Wealthy people can borrow whatever they want from banks, and they can work that out from banks," Flaherty said. "That is not my concern."
In 2006, Canada allowed 40-year mortgages, but has since scaled it back twice to 35 years, then 30 and finally back to 25 years, the CBC said.