Tougher mortgage lending rules, as unveiled by Finance Minister Jim Flaherty on Monday, could add an estimated $100 a month in carrying costs for future homeowners and affect roughly 20,000 home sales in 2011, analysts say.
Those rough estimates emerged after the government announced changes that would see Ottawa no longer guarantee insured mortgages with terms exceeding 30 years (the previous maximum was 35 years).
Also, Mr. Flaherty lowered the maximum amount Canadians can borrow against the value of their homes, to 85% from 90%, on a refinancing; and removed federal government backing for home equity lines of credit, or so-called HELOCs, whose popularity soared in the past decade with growth double that of mortgage debt.
Combined, the measures “will reinforce what we were expecting to be a slower pace of real estate activity,” said Adrienne Warren, senior economist at Bank of Nova Scotia.
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