The federal government has tightened the rules for obtaining a government-backed mortgage to prevent homebuyers from taking on debt loads they may not be able to afford in the future.

The government says expected future interest rate increases pose risks for Canadian homeowners.

Prospective homeowners will soon have to meet the requirements for a five-year, fixed rate mortgage -- as opposed to the three-year standard in place right now. The rule will apply even if they choose a mortgage with a lower interest rate and shorter term.

"One must always guard against the temptation to take on more financial risk simply because interest rates are low. Our government is acting to help prevent Canadian households from getting overextended and acting to help prevent some lenders from facilitating it," Finance Minister Jim Flaherty said Tuesday at a news conference in Ottawa.

"We are best to ensure that we can still manage and have affordable mortgage payments over time and not act as if the present low mortgage payments will remain in perpetuity, which they won't," he added.

Flaherty also announced Ottawa will also limit the amount of mortgage refinancing that homeowners can undertake.

"We will lower the maximum amount Canadians can withdraw in refinancing their mortgages to 90 per cent from 95 per cent of the value of their homes," he said.

The finance minister also announced that housing speculators will now have to put down a 20 per cent down payment on properties they will not be living in, to qualify for a government-backed mortgage.

Avoiding a potential crash

With the housing market booming in some parts of the country due to low interest rates, some experts say the finance minister is trying to head off a potential crash.

"We want to avoid in Canada, a situation they had in the United States of having a market overheat," said Carlos Leitao, chief economist at the Laurentian Bank of Canada.

While the new rules could create a problem for home-owners deep in debt and real-estate speculators, most experts and banks say it's a wise move with minor consequences for most.

"For first-time buyers, no consequences at all, except that you have to make sure that your revenue is supporting the mortgage that you're contracting," said Michel Beausejour, CEO of the Quebec Federation of Real Estate Agents.

The Bank of Montreal says it has already tightened it's criteria for new borrowers.

"We've been doing that for some time now just to make sure that consumers are properly aligned with the property the properties they're buying," said Ronald Monet of the BMO Financial Group.

Simon Prefontaine, a condo owner who was looking to buy a duplex as an investment property, said the new rules mean he will have a while before making a purchase.

But told CTV Montreal's Annie DeMelt that's not necessarily a bad thing.

"I'll have more cash down and my mortgage payments will be smaller, so there's some good and some bad," he said.

The new rules are expected to come into effect on April 19.

With files from CTV.ca News Staff and The Canadian Press