New rules for Canadian mortgages

Finance Minister Jim Flaherty announced new rules for Canadian mortgages on Monday that he said will "protect the stability of the economy."

The Monday announcement included three new rules for the mortgage industry that will come into effect March 18:

• Mortgage amortization periods will be reduced from 35 years to 30 years.
• The maximum amount Canadians can borrow to refinance their mortgages will be lowered from 90 per cent to 85 per cent of the value of their homes.
• The government will withdraw its insurance backing on lines of credit secured on homes, such as home equity lines of credit.

The measures are equivalent to boosting interest rates by half a percent but are more specific, according to Douglas Porter, deputy chief economist at The Bank of Montreal.

http://www.ctv.ca/CTVNews/Canada/20110117/flaherty-mortgage-rules-110117