For the second time in less than one year, the federal government has tightened rules around mortgage financing amid growing concerns about how much personal debt Canadians are taking on —_a move that could add an estimated $100 a month in carrying costs for future homeowners and price others out of the real estate market. The changes could also affect about 20,000 home sales in 2011, analysts say. Finance Minister Jim Flaherty announced Monday the government is reducing the maximum amortization period for government-backed mortgages to 30 years from 35 years. The change will affect mortgages with loan-to-home-value ratios of more than 80 per cent. As well, Canadians will only be able to refinance up to 85 per cent of the value of their homes on government-back mortgages, down from 90 per cent. In addition, the government will no longer insure home-equity lines of credit, or HELOCs.
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