30-year amortization in Canada: who qualifies, and what it really costs
A longer amortization is the easiest lever to make a monthly payment fit, and the rules changed in 2024 to let far more buyers pull it. The trade is simple to state and easy to underestimate: lower payments now, more interest later, and slower equity in the first term. Here is who qualifies, the extra insurance cost, and a calculator to see both sides with your own numbers.
On this page
25 vs 30 year mortgage calculator
What 30 years changes on your mortgage
| 25 years | 30 years | Difference |
|---|
Monthly payments use semi-annual compounding, as Canadian fixed-rate mortgages usually do, and assume the rate stays the same for the whole amortization, which it will not. Premiums use the CMHC homeowner schedule (2.80% above 80% to 85% loan-to-value, 3.10% above 85% to 90%, 4.00% above 90% to 95%) and add CMHC's 0.20% surcharge for 30 years. Other insurers set their own premiums. Provincial sales tax on the premium in Ontario, Quebec and Saskatchewan is not included and cannot be added to the loan. Minimum down payment is 5% of the first $500,000 and 10% of the portion up to $1.5 million for insured loans.
Who qualifies for a 30-year amortization
The Department of Finance parameters, in force for insurance applications submitted on or after December 15, 2024, say the 30-year option applies to high loan-to-value insured mortgages where:
- The loan is more than 80% of the value. In other words, less than 20% down, so mortgage default insurance is required.
- You are a first-time buyer, or the home is newly built. Either one is enough.
- The home is occupied by you or a close relative.
- All other insurance rules still apply, including the price cap, which rose from $1 million to $1.5 million on the same date, and the qualifying rate under the mortgage stress test.
First-time buyer here means at least one of: you have never bought a home; in the last 4 years you have not lived in a home that you or your current spouse or common-law partner owned; or you recently went through the breakdown of a marriage or common-law partnership. New build means the home has not been occupied for residential purposes before; the government says a new condo with an interim occupancy period still counts.
FCAC sums it up: with less than 20% down, your maximum amortization is 30 years if you are a first-time buyer and/or buying a new build, and 25 years in all other cases.
The extra costs of 30 years
| Cost | 25 years | 30 years |
|---|---|---|
| CMHC premium, 5% down | 4.00% of the loan | 4.20% (adds the 0.20% surcharge) |
| CMHC premium, 10% down | 3.10% | 3.30% |
| CMHC premium, 15% down | 2.80% | 3.00% |
| Monthly payment | Higher | Lower |
| Total interest | Lower | Higher, often by tens of thousands |
| Equity after the first term | More | Less |
CMHC announced the 20 basis point surcharge for first-time buyers choosing 30 years in 2024. The premium is usually added to the mortgage, so you pay interest on it too. In Ontario, Quebec and Saskatchewan, provincial sales tax applies to the premium and has to be paid in cash; CMHC says it cannot be added to the loan.
Worked example: Aisha's $500,000 condo
Aisha is a first-time buyer. The condo costs $500,000 and she puts down 5%, or $25,000. Her loan is $475,000, which is 95% of the price, so the CMHC premium rate is 4.00% at 25 years or 4.20% at 30 years. Her rate is 4.5%, compounded semi-annually.
- 25 years: premium $475,000 × 4.00% = $19,000, total loan $494,000, payment $2,734.16 a month, interest over the full amortization $326,248.00.
- 30 years: premium $475,000 × 4.20% = $19,950, total loan $494,950, payment $2,495.61 a month, interest $403,469.60.
- The trade: $238.55 a month lower, in exchange for $77,221.60 more interest and $950 more premium, if the rate never changed.
The rate will change at every renewal, so the lifetime figures are a way to compare, not a forecast. The monthly gap is the part you feel right away. If the lower payment is what gets you through the stress test, the down payment guide and the FHSA plus HBP guide show other ways to change the math.
What happens in the first five years
Most people renew every five years, so the first term matters more than the 30-year total. Same example, after 60 payments:
| After 5 years | 25 years | 30 years |
|---|---|---|
| Balance owing | $433,714.16 | $450,900.96 |
| Principal paid off | $60,285.84 | $44,049.04 |
With 30 years, Aisha owes $17,186.80 more at her first renewal. That matters if prices fall, if she needs to sell early, or if rates are higher when she renews. On the other hand, a 30-year amortization does not stop her from paying faster: many lenders allow lump sums or payment increases, and switching to accelerated payments shortens the amortization. Our guides to prepayment privileges and biweekly vs monthly payments show the effect.
With 20% or more down
The federal 30-year rule is about insured mortgages. FCAC says that if your down payment is more than 20% of the price, your lender sets your maximum amortization. That is a lender policy, so ask each lender what they offer and whether a longer amortization changes the rate. The interest trade-off works the same way.
Options people compare
| Approach | What it gives you | Watch for |
|---|---|---|
| 25 years | Less interest, faster equity, lower premium | Higher payment, harder to qualify |
| 30 years | Lower payment, more room in the budget | More interest, 0.20% surcharge, slower equity |
| 30 years, then prepay | Low required payment with the choice to pay more | Prepayment limits and the discipline to use them |
| Bigger down payment | Smaller loan and premium | Takes longer to save |
These are options to understand, not recommendations. Run your own numbers in the calculator above, or on the tools page.
How to decide between a 25 and 30 year amortization
- Check that your down payment is under 20% and that you are a first-time buyer or buying a newly built home.
- Confirm the price is under $1.5 million and your down payment meets the insured minimum.
- Price the premium at 25 and 30 years, including the 0.20% surcharge and any provincial sales tax on the premium.
- Compare the monthly payment, total interest and balance at your first renewal.
- Ask your lender what prepayment privileges come with the mortgage.
- Choose the amortization you can carry, and set a reminder to review it at renewal.
Questions people ask
Who can get a 30-year amortization in Canada?
For insured mortgages (less than 20% down), first-time buyers and buyers of newly built homes can amortize over 30 years for insurance applications submitted on or after December 15, 2024. Other insured borrowers are limited to 25 years.
Is there an extra cost for a 30-year insured mortgage?
Yes. CMHC adds a premium surcharge of 0.20 percentage points for 30-year amortizations, so a 4.00% premium becomes 4.20%. Other insurers set their own pricing.
How much lower is the payment with 30 years?
It depends on the loan and rate. On a $475,000 purchase loan at 4.5% with a CMHC premium added, the payment is $2,734.16 at 25 years and $2,495.61 at 30 years, about $239 lower.
How much more interest will I pay over 30 years?
In the same example, about $77,222 more over the full amortization if the rate never changed. Rates do change at renewal, so treat it as a comparison.
What counts as a first-time buyer for the 30-year rule?
You have never bought a home; or in the last 4 years you have not lived in a home that you or your current spouse or common-law partner owned; or you recently went through the breakdown of a marriage or common-law partnership.
Can I get 30 years with 20% down?
The federal rule covers insured mortgages. With more than 20% down, FCAC says your lender sets the maximum amortization, so ask your lender.
Can I pay off a 30-year mortgage faster?
Usually, through prepayment privileges such as lump sums or higher payments, within your lender's limits. Paying more shortens the amortization and cuts interest.
Looni's calculators show the payment, the interest and the balance at renewal side by side with your own numbers. Read-only, no advice.
Sources
Department of Finance Canada, Delivering the Boldest Mortgage Reforms in Decades (30-year eligibility, loan to value above 80%, first-time buyer and new build definitions, $1.5 million cap, minimum down payment, effective December 15, 2024) and Boldest mortgage reforms in decades come into force today; Financial Consumer Agency of Canada, Mortgage relief options (30 or 25 year maximums, lender sets the maximum with more than 20% down); CMHC, CMHC Revises Homeowner Mortgage Loan Insurance Premiums (0.20% surcharge for 30 years) and Mortgage loan insurance premiums (premium schedule, provincial sales tax on premiums). Example rate and price are illustrative; the arithmetic is ours.
Want the full interest picture for your own balance? Our mortgage interest calculator shows interest this term, the balance at renewal and lifetime interest.