BMO Bank of Montreal (TSX:BMO) is strongly endorsing Finance Minister Jim Flaherty's plan to further tighten mortgages.
Flaherty announced Wednesday that the government is reducing the maximum amortization period for a government-insured mortgage to 25 years from 30 years.
The new rules take effect July 9.
In early 2011, the federal government reduced the maximum amortization periods for government-insured mortgages to 30 years from 35 years. (See "Ottawa tightens mortgage rules to curb household debt"–January 17, 2011.)
This morning, BMO released a statement of strong support for the most recent change.
"The changes announced by Minister Flaherty are prudent, measured, responsible, timely and aligned with BMO's ongoing efforts to encourage Canadians to choose a mortgage with a shorter amortization," said Frank Techar, president, personal and commercial banking, at BMO, in the statement.
He added that BMO believes the new measures will support the long-term stability of the Canadian housing market.
"Minister Flaherty has tapped the brakes at precisely the right time and his actions should help ensure Canada's housing market experiences a soft landing."
