Finance Minister Jim Flaherty pledged today to triple the amount of mortgages the government can buy from banks to as much as C$75 billion ($61 billion). He also reduced the cost for banks to tap a government loan insurance program by 50 basis points after it went unused at the initial premium of as much as 185 basis points, or 1.85 percentage points.

What does this mean to the average Buyer contemplating the purchase of a home?

Flaherty admits that Canada's banks are amongs the world's safest but does that assure consumers that our banks can still provide not only competitive rates of interste, but realistic ones?

Today's announcement was a ``constructive step'' that ``helps ensure consumers and businesses have access to credit and Canadian banks continue to operate from a position of strength,'' said Gordon Nixon, chief executive officer of Royal Bank of Canada, the nation's biggest lender by assets, according to a statement.

The finance minister met with banking executives earlier today in Toronto to discuss the changes. The U.S. recession and the global financial crisis are ``major shocks'' to Canada that will likely require more interest-rate cuts, Bank of Canada Senior Deputy Governor Paul Jenkins added earlier today in Toronto.

Canada's central bank today also said it will inject an additional C$8 billion into the banking system to temporarily buy up ``non-mortgage loan portfolio'' assets. And the state- owned Canada Mortgage and Housing Corp. today bought C$7 billion of mortgages for five years at an average yield of 3.78 percent, in the third phase of the purchase program.

The mortgage purchase plan has been the ``most effective'' measure and will remain more popular than loan insurance because it's a cheaper way of raising cash, said Eric Lascelles, chief economics and rates strategist at TD Securities in Toronto. Taken together, the steps should reduce bank financing costs and ``possibly'' make credit cheaper to consumers and companies, he wrote today in a note to clients.

Info paraphrases from: Theophilos Argitis in Toronto at targitis@bloomberg.net; Greg Quinn in Ottawa at gquinn1@bloomberg.net.

Robert J. Morrow is editor of www.HamiltonHomeReview.com, an online real estate magazine serving Greater Hamilton, Ontario. Click here for a FREE SUBSCRIPTION sent to your email monthly. Click here to receive new Hamilton area listings in your email daily.