| TORONTO, March 19
TORONTO, March 19 Manulife Financial
said on Tuesday it is reversing a decision to cut mortgage rates
following pressure from Canada's finance ministry, which has
raised concerns about record consumer debt levels.
Manulife, which is Canada's largest insurer but also offers
banking services such as mortgages, said this week it would
offer five-year loans at 2.89 percent, down from its previous
3.09 percent and lower than the posted rates of any of Canada's
top five banks.
But the company said on Tuesday it is pulling the low-rate
"After consulting with the Department of Finance, Manulife
Bank has withdrawn the promotional campaign and reverted to our
previous posted rate," Manulife spokesman Graeme Harris said in
an emailed statement.
Finance Minister Jim Flaherty has tightened mortgage lending
rules several times in an effort to cool higher-risk lending and
reduce the chances of a U.S.-style housing market crash.
Earlier this month, Flaherty warned the country's banks not
to engage in the kind of risky lending that led to the U.S.
housing crisis, after Bank of Montreal cut a popular mortgage
rate back to a near-record low.
Canadian housing sales activity has slowed as a result of
the last round of mortgage rule changes in July. But prices have
remained high as low interest rates have allowed lenders to
offer mortgages at historically low levels.