Since the credit crisis, the Department of Finance has been ready to clamp down on mortgage lending. And now, Finance Minister, Jim Flaherty, has announced the fourth round of mortgage restricions in 4 years.

As of July 09th, 2012, those with less than 20% equity will no qualify for a prime mortgage with:

  1. a 30 year amortization (max will be 25)
  2. a refinance to 85% LTV (max will now be 80%)

In addition, the government will:

  1. Limit the maximum GDS and TDS to 39% and 44% respectively (Currently, GDS does not apply to qualied borrowers with credit scores of 680+
  2. Ban Mortgage Insurance on properties over 1$ million.

These rules are a "judgement call" says Flaherty. They're meant to "lower risk" for taxpayers and curb excessive household debt, which is Canada's biggest economic risk. The above initiatives are in addition to pending OSFI Mortgage restrictions, which will dampen home-buying demand even further.

These are significant changes to Canada's lending landscape.