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Houses are seen in Mississauga, Thursday October 29, 2015.Mark Blinch/The Globe and Mail

Canada's mortgage lenders and the largest private insurer plunged amid concerns that new measures by the federal government to cool the housing market will hurt their businesses.

Genworth MI Canada Inc. led the declines, with an 11-per-cent drop at 12:24 p.m. in Toronto, its biggest intraday drop since August 2009. The Toronto-based mortgage insurer said more than a third of insured mortgage borrowers would struggle to meet the new standards introduced Monday.

First time homebuyers in particular "would have difficulty meeting the required debt service ratios and homebuyers would need to consider buying a lower priced property or increase the size of their down payment," the company said Tuesday in a statement. About 50 per cent to 55 per cent of the company's total portfolio of new insurance written would no longer be eligible for mortgage insurance under the new requirements, the company said.

Finance Minister Bill Morneau introduced the measures in a bid to cool the housing market and curb the rise in household debt. The moves include tougher standards to get mortgage insurance and increased stress tests for homebuyers. The government is also cracking down on non-residents who have been using a loophole to gain exemptions on capital gains taxes on the sale of their homes.

The moves may slow the pace of lending while increasing costs for mortgage insurance, analysts including Peter Routledge at National Bank Financial have said.

Equitable Group Inc., the Toronto-based mortgage lender, plunged 6.4 per cent to $55.10, the biggest decline in more than eight months. First National Financial Corp., another Toronto-based mortgage provider, dropped 6.7 per cent and Home Capital Group Inc. fell 2.4 per cent. The eight-company S&P/TSX Commercial Banks Index, which includes Bank of Nova Scotia and Royal Bank of Canada, was little changed.

The independent mortgage lends will have more difficulty than the Big Six Canadian banks absorbing the changes because they have less earnings diversity with which to offset these costs, Mr. Routledge said in a note to clients.

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