Canada is tightening mortgage lending rules as historic low rates are raising fears of a potential housing bubble.
Finance Minister Jim Flaherty said Tuesday there is no compelling evidence of a bubble but says the government is taking proactive measures to prevent one.
To qualify for a government-insured mortgage, borrowers will have to meet the standards for a five-year fixed-rate mortgage — up from the current standard for three years.
Flaherty also says if Canadians want to purchase a property where they will not be living, they will have to come up with a 20 percent down payment.
Prospective homeowners will also be limited to borrowing 90 percent of the value of their home instead of 95 percent to get government insurance.
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