This morning, the Federal Government announced 3 changes to rules for Government-backed mortgages:

1.  The maximum amortization period is reduced from 35 years to 30 years. 

2.  The maximum amount of the value of a home that can be refinanced will drop from 90% to 85%.

3.  Government insurance will no longer be available to financial institutions wishing to insure home equity lines of credit.

The adjustments to the mortgage insurance guarantee framework will come into force March 18, 2011.  The withdrawal of Government insurance backing on lines of credit secured by homes will come into force April 18, 2011.

What hasn't changed is the minimum amount of downpayment required for mortgage financing, which is currently 5% with mortgage insurance (high-ratio), and minimum 20% without mortgage insurance (conventional mortgage).  The change in the maximum ammortization period means a higher monthly payment for qualified buyers, but a savings on the total interest paid over the life of the mortgage.