Finance Minister Jim Flaherty tightens mortgage rules.
OTTAWA — The federal government is moving once again to tighten mortgage-lending rules amid lingering concerns about an overheated housing market and household debt levels.
In a move called for by some of the big banks, Finance Minister Jim Flaherty announced Thursday the federal government is reducing the maximum amortization period for a government-insured mortgage to 25 years from 30 years.
It’s the third time the government has reduced the maximum amortization period in the last four years, ratcheting it back from 40 years to 35 in 2008, and then further reduced to 30 years in 2011.
Banks will still be allowed to offer 30-year amortization periods on low-ratio mortgages that include a downpayment of 20 per cent or more.