30-year amortization is now available on insured mortgages for first-time buyers and for any buyer purchasing a newly constructed home, following federal mortgage reforms that took effect August 1, 2024 (new builds) and December 15, 2024 (first-time buyers across all property types). Uninsured mortgages (20 percent or more down) have been eligible for 30-year amortization for years at most lenders. The longer term lowers the monthly payment but increases total interest paid over the life of the mortgage. A 0.20 percent insurance premium surcharge applies if the mortgage is insured at 30 years.
What changed in 2024
| Date | Change |
|---|---|
| August 1, 2024 | Insured mortgages on newly constructed homes can be amortized up to 30 years for first-time buyers. |
| December 15, 2024 | Insured mortgages can be amortized up to 30 years for first-time buyers on any property type. The insured mortgage cap also rose from $1 million to $1.5 million. |
| Existing rule preserved | Uninsured mortgages (20 percent or more down) have continued to allow up to 30-year amortization at most lenders, and 35-year amortization at some specialty lenders. |
Who qualifies for 30-year insured amortization
| Buyer type | Property type | 30-year insured allowed? |
|---|---|---|
| First-time buyer | Any (resale or new build) | Yes |
| Repeat buyer | Newly constructed home | Yes |
| Repeat buyer | Resale home | No (capped at 25 years insured) |
| Any buyer with 20%+ down | Any | Yes (uninsured 30-year mortgages remain available at most lenders) |
“First-time buyer” for these purposes generally means a person who has not, in the four-year period ending on the day before the closing of the new home, owned a home that they occupied as their principal residence.
Monthly payment difference
| Mortgage | Rate | 25-year payment | 30-year payment | Monthly saving |
|---|---|---|---|---|
| $500,000 | 5.00% | $2,908 | $2,673 | $235 |
| $700,000 | 5.00% | $4,072 | $3,742 | $330 |
| $1,000,000 | 5.00% | $5,816 | $5,346 | $470 |
Total interest cost difference
| Mortgage | Rate | 25-year total interest | 30-year total interest | Extra interest at 30 years |
|---|---|---|---|---|
| $500,000 | 5.00% | $372,415 | $462,402 | $89,987 |
| $700,000 | 5.00% | $521,381 | $647,363 | $125,982 |
| $1,000,000 | 5.00% | $744,830 | $924,803 | $179,973 |
The 0.20 percent premium surcharge
For insured mortgages with 30-year amortization, the default insurance premium is increased by 0.20 percentage points. On a $655,000 mortgage at 5 percent down, the standard premium is $655,000 × 4.00% = $26,200. With 30-year amortization the premium becomes $655,000 × 4.20% = $27,510, an additional $1,310 added to the mortgage.
Trade-offs to weigh
- Lower payment improves the GDS/TDS qualifying ratios, expanding the maximum mortgage. For a buyer at the edge of qualifying, the 30-year option may be the difference between approval and decline.
- Higher total interest is a real cost. Interest in the first decade is heavily front-loaded in any mortgage; the 30-year option just extends the back end with relatively low payments where principal is decreasing slowly.
- Most buyers do not amortize a single mortgage for the full 30 years. They renew, refinance, or sell within 5 to 10 years. The “extra interest” comparison assumes you carry the same mortgage to maturity, which is rare.
- Prepayment privileges (typically 10 to 25 percent of original principal annually) let you accelerate payoff if your income rises. Many buyers take 30 years for the qualifying benefit but pay it down faster.
What “newly constructed” means
For the August 2024 expansion, a newly constructed home is generally a home where the buyer is the first occupant. This includes:
- Homes purchased directly from a builder or developer.
- Pre-construction condos.
- Custom builds on owned land.
- Substantially renovated homes meeting the GST/HST new housing rebate definition.
It does not include: any home where someone has previously lived as their principal residence after construction.
Cross-references
- 5% vs 10% vs 20% Down Payment in Canada
- CMHC Mortgage Default Insurance
- OSFI B-20 Mortgage Stress Test
Frequently asked questions
- Is 30-year amortization available in Canada?
- Yes. Insured mortgages allow 30-year amortization for first-time buyers on any property type, and for any buyer purchasing a newly constructed home. Uninsured mortgages (20 percent or more down) generally allow 30 years at most lenders.
- When did the 30-year option expand?
- August 1, 2024 for first-time buyers purchasing newly constructed homes, and December 15, 2024 for first-time buyers on any property type.
- Does 30-year amortization cost more?
- Yes. Insured 30-year mortgages add a 0.20 percent surcharge to the default insurance premium, and the longer term increases total interest if the mortgage is held to maturity.
- Who counts as a first-time buyer?
- A person who has not, in the four-year period before closing, owned a home they occupied as their principal residence.
- Can a repeat buyer use 30-year amortization?
- Only for newly constructed homes (insured), or with 20 percent or more down (uninsured). Repeat buyers purchasing resale homes with less than 20 percent down are capped at 25 years.
- Will 30-year amortization help me qualify for a larger mortgage?
- Yes. Lower monthly payment improves the GDS/TDS ratios, allowing the lender to qualify a larger mortgage at the same income.
- Should I always pick 30 years if I can?
- Many buyers do, then prepay aggressively. The 30-year term widens approval and improves cash flow; prepayment privileges let you reduce total interest if income rises later.