New mortgage rules announced by Finance Canada

The federal Department of Finance has moved once again to tighten mortgage lending rules for Canada Mortgage and Housing Corporation-insured mortgages – generally those where the mortgage amount exceeds 80% of the cost of the home.


The new measures:

  • Reduce the maximum amortization period to 30 years from 35 years for new government-backed insured mortgages with loan-to-value ratios of more than 80%
  • Lower the maximum amount Canadians can borrow in refinancing their mortgages to 85% from 90% of the value of their homes
  • Withdraw government insurance backing on non-amortizing lines of credit secured by homes, such as home equity lines of credit

Implementation of the new rules is staggered—the changes with respect to the maximum amortization periods and borrowing amounts will take effect on March 18, 2011, while the withdrawal of government insurance backing on home equity lines of credit will come into force on April 18, 2011.

The Finance Canada press release announcing the changes, together with a backgrounder providing additional information and history can be found on the Finance Canada Web site at


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