Canada to tighten mortgage rules: report

Mon Jan 17, 2011 7:43am EST
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TORONTO (Reuters) - The Canadian government is tightening mortgage rules with new measures to rein in record levels of household debt, the Globe and Mail newspaper reported on Monday.

It said the federal department of finance is expected to announce that Ottawa will stop backing mortgages with amortization periods longer than 30 years, which would eliminate support for the 35-year mortgage.

Finance Minister Jim Flaherty is also expected to reduce government backing for home equity lines of credit, the newspaper said, citing sources familiar with the plans.

The report said the Conservative government would not comment on the subject of expected announcement later on Monday.

(Reporting by Claire Sibonney, Editing by Maureen Bavdek)