The Canadian government is seeking to introduce more tough rules for granting mortgages, making sure consumers don't take on more debt than they can handle, the Globe and Mail newspaper reported on Thursday.

The proposed rules could require banks to judge if a borrower with a variable-rate mortgage would be able to afford payments should interest rates raise, the Toronto-based newspaper said today, citing unidentified people.

The report reveals the main reason behind principal proposal was to require banks to consider whether a person who takes out a variable-rate mortgage can continue to make payments if interest rates were to go up significantly.

Finance Minister Jim Flaherty revealed on the weekend there was no evidence yet that home buyers were initiating on unsustainable levels of debt, however, that he had fasten the belts to tighten insurance rules for riskier mortgages if necessary.

Former Bank of Canada Governor David Dodge suggested in a television interview on Wednesday that the federal housing agency, Canada Mortgage and Housing Corporation, should seek carefully at the current terms for insuring mortgages.

However, the report posted that after studying the potential affect of wanting higher down payments and shorter amortizations, the finance minister believes that such moves would take too much heat out of the market and damage the economic recovery.