Canada's Finance Minister Jim Flaherty announced on Monday a tightening of rules governing household borrowing. The new rules will give the Bank of Canada more authority to halt increases in interest rates.
Among the changes will be a shortening of the maximum amortization period for government-insured mortgages from 35 years down to 30 years. Flaherty said the maximum amount homeowners can borrow against the value of their home will be reduced. The government will also withdraw its insurance on home equity credit lines.
This government understands the importance of not taking on more than you can afford and the dangers of ongoing debt, Flaherty, 61, told reporters today in Ottawa. A stable and sustainable housing market keeps our economy strong.
Canada has generally tried to stop rising debt levels by tightening mortgage regulations. Monday's announcement gives banks a little more flexibility in achieving these goals as the nation continues to recover from recession.
-- Edited by Marin Real Estate on Wednesday 19th of January 2011 11:20:10 AM
