30-year amortization in Canada: who qualifies and what it costs
With less than 20% down, a 30-year amortization is only for first-time buyers and buyers of new builds, on homes below $1,500,000, and adds 0.20 points to the insurance premium. With 20%+ down it depends on the lender. On a $477,500 home it cuts the payment by $217 a month but adds about $61,789 of interest.
Worked examples use 4.12%, the Bank of Canada's average effective rate on new insured 5-year-plus fixed mortgages (2026-08), and are recalculated whenever our rules or rates are updated.
The short answer
A 30-year amortization spreads your mortgage over 30 years instead of 25, which lowers the monthly payment and raises what you qualify for. In exchange you pay more interest and build equity more slowly. With less than 20% down, it is only allowed for first-time buyers and buyers of newly built homes, and the insurance premium is 0.20 points higher.
In our example, a first-time buyer earning $100,000 with $50,000 down could qualify for about $501,800 over 30 years, against $477,500 over 25.
Who qualifies for a 30-year amortization
| Insured (less than 20% down) | Uninsured (20% or more down) | |
|---|---|---|
| Who can get 30 years | First-time buyers and buyers of new builds only | Set by each lender; most lenders offer it |
| Standard maximum | 25 years for everyone else | Lender policy |
| Price limit | Below $1,500,000 | None from insurance rules |
| Extra cost | Premium 0.20 points higher | No premium; the lender may price it differently |
| Stress test | The same for both: your rate plus 2 points, or 5.25% if higher | |
First-time buyer, for this rule
CMHC's definition for its 30-year product is broad. At least one borrower must have never bought a home in Canada, or not have lived in a home they or a spouse owned in the current year or the four calendar years before, or be newly separated. Only one borrower on the application needs to qualify.
New build
The home must be newly built and not previously lived in. Buyers of new builds qualify even if they have owned before.
Since when
This took effect on December 15, 2024, together with the higher $1,500,000 price cap for insured mortgages. Before that, 30-year insured amortizations were much more limited. A repeat buyer of a resale home with less than 20% down is still limited to 25 years.
25 vs 30 years on the same home
The same $477,500 home in Ontario with $50,000 down at 4.12%. The premium differs because of the 0.20-point surcharge, so the 30-year mortgage starts slightly larger.
| 25 years | 30 years | Difference | |
|---|---|---|---|
| Insurance premium rate | 3.10% | 3.30% | +0.20 points |
| Premium (added to loan) | $13,253 | $14,108 | $855 |
| Monthly payment | $2,347 | $2,130 | -$217 |
| Interest in the first 5 years | $84,570 | $86,163 | $1,593 |
| Balance after 5 years | $384,490 | $399,969 | $15,479 |
| Equity after 5 years (no price change) | $93,010 | $77,531 | -$15,479 |
| Total interest over the full amortization | $263,410 | $325,199 | $61,789 |
The 30-year option saves $217 a month. After a five-year term you would owe $15,479 more, and over the full life of the loan you would pay about $61,789 more interest if the rate stayed the same. Real rates will change at each renewal, so treat the lifetime figure as an illustration.
Two details are easy to miss. The payment falls by only about 9%, because early payments are mostly interest either way: interest over the first five years is almost the same ($84,570 vs $86,163). The real difference is how much principal you pay off, which is why the balance after five years is $15,479 higher on the 30-year mortgage.
How much more you can qualify for
Lenders test your payment at the qualifying rate (6.12% here). Over 30 years that payment is smaller, so more of your income fits under the GDS and TDS limits. With $100,000 of income, $400 a month of other debts and $50,000 down:
- 25 years: maximum price about $477,500, mortgage $440,753, payment $2,347 a month.
- 30 years: maximum price about $501,800, mortgage $470,776, payment $2,271 a month.
That is $24,300 more house. Note that the 30-year payment on the bigger home ends up close to the 25-year payment on the smaller one, so using the extra room means the monthly saving disappears.
30 years with 20% or more down
Uninsured mortgages are outside the insurance rules, so the amortization is up to the lender. Most lenders offer up to 30 years on uninsured mortgages. The stress test is the same, but some lenders price longer amortizations differently, so ask before you assume.
Example: a repeat buyer earning $150,000 with $200,000 down and no other debts could qualify for about $855,400 over 25 years or $899,400 over 30, with no insurance premium either way.
What happens at renewal
Your rate is fixed only for the term, often five years. Suppose rates are one point higher (5.12%) when you renew, and you keep the remaining amortization:
- 25-year mortgage: $384,490 left over 20 years, a new payment of about $2,552 (up $204).
- 30-year mortgage: $399,969 left over 25 years, a new payment of about $2,354 (up $224).
The longer amortization still has the lower payment at renewal, but it carries a bigger balance into the higher rate. If you used the 30-year room to buy the maximum, plan for a renewal payment that could be higher than today's. This is an illustration, not a rate forecast.
Taking 30 years but paying it off faster
Some buyers choose 30 years for the lower required payment, then pay more when they can. If the buyer above took 30 years but paid the 25-year amount ($2,352 a month on the $441,608 loan), the mortgage would be gone in about 25 years, with total interest of about $263,921.
This only works if your mortgage allows it. Prepayment privileges, such as payment increases or lump sums, are set in each lender's contract and vary. Check them before you sign, and remember that the 30-year premium surcharge is already paid even if you pay the mortgage off sooner.
Is a 30-year amortization worth it?
- It can help if the lower payment lets you buy a home that fits your life now, if your income is likely to rise, or if you will use prepayments to shorten it.
- Be careful if you need 30 years just to reach the maximum price. You start with less equity, and at renewal a higher rate would hit a larger balance.
- Compare both in the mortgage payment calculator and the affordability calculator, using your own rate.
Questions to ask before you choose
- Do I qualify? Confirm that at least one borrower meets the first-time buyer test, or that the home is a new build, and that your down payment is under 20%.
- What does it cost? Ask the lender for the premium at both amortizations, and whether the rate is the same.
- Can I prepay? Ask how much you can add to payments or pay as a lump sum each year without a penalty.
- Could I handle renewal? Rerun your payment at a higher rate on the balance you would owe after your term.
- Am I buying more because I can? If the 30-year room only pushes you to a higher price, the lower payment you wanted may not last.
For how the premium works, see CMHC mortgage insurance. For the difference between insured and uninsured loans, see insured vs uninsured mortgages.
Frequently asked questions
Who qualifies for a 30-year amortization in Canada?
On an insured mortgage (less than 20% down), first-time buyers and buyers of newly built homes, on homes below $1,500,000. Only one borrower needs to be a first-time buyer. With 20% or more down, each lender sets its own policy, and most offer 30 years.
Is a 25 or 30-year mortgage better?
It depends on your budget. In our $477,500 example, 30 years lowers the payment by $217 a month but leaves $15,479 more owing after five years and adds about $61,789 of interest over the full term if rates stayed the same.
Does a 30-year amortization cost more for mortgage insurance?
Yes. On insured mortgages, amortizations over 25 years add 0.20 percentage points to the premium rate. CMHC, Sagen and Canada Guaranty all apply this surcharge.
Can I get a 30-year mortgage with 20% down?
Usually. Uninsured mortgages are not bound by the insurance amortization rules, and most lenders offer up to 30 years. The stress test still applies, and pricing is set by the lender.
Can I shorten my amortization later?
Often, yes. Paying more than the required amount through your mortgage's prepayment privileges shortens it, and you can usually choose a shorter amortization at renewal. Prepayment terms vary by lender, so check your contract.
Primary sources
- CMHC — Home Start: 30-year amortization for first-time buyers and new builds. Checked .
- Department of Finance Canada — Mortgage reforms in force: $1.5M insured price cap, 30-year amortization (effective December 15, 2024). Checked .
- CMHC — Homeowner mortgage loan insurance: Purchase (eligibility). Checked .
- Canada Guaranty — Products at a glance (effective July 1, 2025). Checked .
- OSFI — Minimum qualifying rate for uninsured mortgages (Guideline B-20). Checked .
- Justice Laws — Interest Act, R.S.C. 1985, c. I-15, s. 6. Checked .