New measures designed to head off a U.S.style sub-prime mortgage crisis.

Concerns that cracks were beginning to appear in the foundations of Canada's housing market were behind the government's surprise decision to crack down on loose mortgage conditions ushered in less than two years earlier.

Starting Oct. 15, Canadians will no longer be able to purchase a home with a government-backed mortgage with a 40-year amortization and no down payment.

Instead, mortgages will be limited to 35 years and the government will only insure 95 per cent of the value of the home, meaning buyers will need to come up with at least a five per cent down payment.

Borrowers must also demonstrate that debt servicing costs are no more than 45 per cent of gross income and have a good credit rating.