Finance Minister Jim Flaherty announced new rules Tuesday aimed at preventing homebuyers from getting into financial problems when mortgage rates rise.

"Today's measures are part of a larger picture. We will continue to closely monitor developments in the housing sector in Canada", said Flaherty at a news conference in Ottawa.

Flaherty extended the latest three weapons as a part of the plan at Ottawa's disposal, after referring with major Canadian lenders, with an aim to remove some of the speculative froth in the housing market.

First, Ottawa will require that all borrowers fulfill the standards for a five-year fixed-rate mortgage, even if they opt for a variable mortgage with a lower rate or a shorter term.

Second, the rules framed would reduce the maximum Canadians can withdraw on refinancing their mortgages to 90 per cent of the value of their home, from 95 per cent.

Last but not the least, Ottawa now requires a minimum 20 per cent down payment as a mandatory rule to fetch CMHC insurance for non-owner-occupied properties purchased as an investment.