Should You Get a 30-Year Mortgage in Canada? Here’s What You Need to Know Before You Decide -

Why the 30-Year Mortgage Is Suddenly a Hot Topic in Canada

If you’ve been house-hunting lately — or even just thinking about it — you’ve probably come across the term “30-year mortgage.” It sounds like a good deal, right? Lower monthly payments, more flexibility, a chance to afford the kind of home you actually want?

But as always in the world of mortgages, there’s a lot more going on beneath the surface.

In 2025, with sky-high home prices and still-elevated interest rates, many Canadians are looking for ways to ease the monthly burden of homeownership. A 30-year mortgage might sound like the perfect solution — but it’s not one-size-fits-all. Let’s walk through what a 30-year mortgage really means in Canada, how it works, and whether it makes sense for your situation.

What’s the Difference Between a 25-Year and a 30-Year Mortgage in Canada?

In Canada, most people are familiar with the standard 25-year amortization. That just means you’ll pay off your mortgage over 25 years (not that your mortgage term is 25 years — that’s usually 5 years or less, and then you renew). But with a 30-year amortization, you stretch out those payments across an extra five years.

This extra breathing room lowers your monthly payments, which can be a lifesaver if you’re buying in a city like Toronto or Vancouver where even a modest condo can feel out of reach.

Here’s the catch, though: in most cases, 30-year mortgages are uninsured. That means you’ll need at least a 20% down payment to qualify. Mortgage insurers like CMHC, Sagen, or Canada Guaranty generally won’t insure loans longer than 25 years — at least not until recently.

New for 2025: As of December 15, 2024, the federal government now allows first-time homebuyers and those buying newly built homes to qualify for insured 30-year mortgages. That means, in specific cases, you can buy with just 5% down and opt for a longer amortization.

This rule change is a big deal — and a direct response to housing affordability challenges.

Why Some Canadians Are Choosing 30-Year Mortgages (Even With the Downsides)

So why is this longer mortgage term appealing, even if it costs more in the long run?

The answer is simple: monthly affordability.

Let’s say you’re a first-time buyer hoping to purchase a $700,000 home. With a 25-year mortgage, the monthly payments might be a stretch, especially if interest rates are still hovering around 5–6%. But with a 30-year mortgage? You could reduce your monthly payment by hundreds of dollars — freeing up room in your budget for everyday expenses, debt repayment, or even investing.

It also increases your maximum mortgage approval. In other words, you might qualify for a more expensive home because the lender calculates your affordability based on those lower monthly payments.

And for buyers trying to enter the market without overstressing their budget, that difference can make or break their homeownership dreams.

But It’s Not All Good News — 30-Year Mortgages Come With Trade-Offs

Let’s not sugar-coat it: there are definite drawbacks to choosing a longer mortgage.

The biggest one? You’ll pay way more interest over the life of the loan. Those extra five years of payments might seem small month-to-month, but they add up significantly. Even a difference of a few thousand dollars in interest each year can balloon to tens of thousands over three decades.

Another downside is fewer insurance options. Unless you’re buying a new build or you’re a first-time buyer, most 30-year mortgages will need to be uninsured. That means a larger down payment — at least 20% — which can be a major hurdle if you’re just starting out.

Also, depending on the lender, uninsured mortgages might carry slightly higher interest rates. Since the bank is taking on more risk, they often charge a premium — which further increases your total borrowing costs.

And finally, a longer mortgage means a longer time in debt. If your goal is to be mortgage-free by retirement, adding five extra years to your plan might push that dream further away — unless you plan to make extra payments along the way.

So, Is a 30-Year Mortgage the Right Fit for You?

It depends. A longer amortization can be helpful — or even necessary — depending on where you are in life.

Here’s how to figure it out:

1. Are you buying your first home or a new build?
If yes, the recent regulation changes give you a rare window to qualify for a 30-year mortgage with less than 20% down. That could mean finally being able to afford a home in the location you want.

2. Is cash flow your biggest concern?
If you’re juggling other expenses like student loans, childcare, or saving for retirement, a lower monthly payment could take the pressure off and help you balance it all.

3. Do you have the option to pay extra later?
Many lenders allow you to make lump-sum payments or increase your regular payments once your financial situation improves. A 30-year mortgage could be your short-term solution, with a long-term plan to pay it down faster.

4. Is your goal to pay the least interest possible?
If you’re focused on total cost and becoming debt-free sooner, a 25-year mortgage might be a better choice — even if the payments are a little tighter upfront.

When a 30-Year Mortgage Makes the Most Sense

These scenarios are where a 30-year mortgage can really shine:

You’re buying an investment property and want to maximize rental income by minimizing monthly costs
You’re refinancing and need access to equity (especially for renovations or consolidating high-interest debt)
You’re incorporated and using your company to guarantee the mortgage — and you prefer maximizing cash flow
You’re a first-time buyer who can qualify for the new insured 30-year program and want to ease into homeownership

FAQs About 30-Year Mortgages in Canada

Can I get a mortgage longer than 30 years?
Technically yes, but not through major banks. Only certain subprime or private lenders offer 35–40 year amortizations, and those often come with higher interest rates and stricter conditions.

Are 30-year mortgages common in Canada?
They’re becoming more common, especially as housing affordability continues to be a national concern. But they’re still less mainstream than in the U.S., where 30-year fixed-rate mortgages are the norm.

Is it better to get a 25- or 30-year mortgage in 2025?
There’s no universal answer — it depends on your down payment, budget, income stability, and financial goals. A 25-year mortgage saves you more in interest, while a 30-year mortgage gives you more financial flexibility.

Final Verdict: The 30-Year Mortgage Is a Tool — Use It Wisely

Choosing a 30-year mortgage doesn’t mean you’re making a bad decision. It just means you’re prioritizing monthly breathing room — and that’s okay.

What matters most is how it fits into your bigger financial picture. If a longer amortization helps you break into the housing market, gives you time to grow your income, and still lets you save for other goals, it can be a smart move.

But don’t forget the long game. If you do go with a 30-year mortgage, look for ways to accelerate your payments over time. Even paying a little extra each month can shave years off your loan and save you thousands in interest.