Canadians are taking on less mortgage debt, slowing a trend that had top government officials worried about the state of consumers’ household finances.

The Canadian Mortgage and Housing Corp. said Tuesday in its third-quarter report that the growth of mortgage loans has slowed down to an average of just under $160,000.

That reflects tougher lending rules imposed by Ottawa and a slowing economy, which has put downward pressure on house prices.

The agency also noted that mortgage insurance bought by homeowners facing high-ratio debts fell by about 10%,

“The level of household debt remains a concern but there are encouraging signals,” CMHC said.

A weaker economy has made consumers more cautious and less likely to take on higher personal loans, lines of credit, car loans and credit card debt.

A slowdown in mortgage debt also suggests Canadians are putting more money down on a house and avoiding high-risk mortgages.

CMHC noted that there was a drastic slowdown in mortgage debt growth after a move by federal Finance Minister Jim Flaherty to tighten mortgage eligibility rules earlier in the year, the third such action by the government in as many years.

Homeowner refinancing initially fell by 40% and was still 25% less at the end of September than before the changes.

In March, the government reduced the maximum amortization period for new government-backed insurance mortgages from 35 years to 30.

Canadian mortgages must be insured if a homeowner pays less than 20% of a house’s value in a downpayment.

As well, Ottawa cut the amount Canadians can borrow in refinancing mortgages from 90% to 85% of the value of a home.

“In general, the economic conditions experienced to date in 2011 have been favourable with respect to claims incurred by CMHC’s mortgage loan insurance business,” the CHMC report said.

“Mortgage rates have been relatively stable, the housing market has been healthy and the unemployment rate has steadily decreased.”

Flaherty and Bank of Canada governor Mark Carney have been warning for months that Canadians have been racking up more debt than they can sustain as a result of a long period of ultra-low interest rates.

Earlier this fall, Statistics Canada reported that Canadian household debt had reached a record 149% of disposable income in the second quarter.

In October, the International Monetary Fund warned that Flaherty may need to act a fourth time to keep mortgage debt under control.

It said that a combination of households strapped by debt and falling home prices have the potential to damage the domestic Canadian economy by curtailing spending.

However, officials with the CMHC said the average outstanding loan on their books was $159,740 at the end of the third quarter, slightly above the previous year.

But the average equity of homeowners in their homes was 45%, compared to 44% for the same period last year.

The CMHC says only 0.42% of CMHC mortgages were in arrears during the period, a rate in line with the industry trend.

The government’s housing agency believes mortgage rates will remain relatively flat until late 2012.