New 30-Year Amortization for First-Time Buyers: What You Need to Know

If you're a first-time home buyer in Canada, there's an important new rule that could make your monthly mortgage payments more manageable: you may now qualify for a 30-year amortization on an insured mortgage.

This update gives certain buyers the ability to stretch payments over a longer period, reducing monthly costs and making homeownership a little more accessible—especially in a higher interest rate environment.



Here’s what you need to know.

Who Qualifies for the New 30-Year Option?

To be eligible, you must meet all of the following criteria:

• Be a first-time home buyer, which means:
• You’ve never owned a home before, or
• You haven’t lived in a home you (or your spouse/common-law partner) owned in the past 4 years, or
• You’ve recently gone through a separation and have been living apart for 90+ days
• Be putting less than 20% down (which means your mortgage must be insured)
• Be buying a new construction home or meet the first-time buyer definition above
• The home must be owner-occupied, or for an immediate family member
• Accept a small CMHC premium surcharge of 0.20% for choosing the 30-year amortization option

Why Do Buyers With Smaller Down Payments Sometimes Get Better Rates?

This part surprises a lot of people.

Even though buyers with lower down payments need to pay for mortgage default insurance (like CMHC), those insured mortgages are often seen as less risky by lenders. That’s because the insurance protects the lender in case of default.

As a result, insured mortgages often come with lower interest rates than uninsured (conventional) mortgages, even if you’ve saved up 20% or more.

In other words, it’s not just about how much you put down—it’s about how the lender assesses risk.

What Does This Look Like in Real Life?

Let’s say you’re looking at a $700,000 home. You’ve saved either 10% or 20% down. Both scenarios now allow a 30-year amortization, but the terms and payments are very different.

To illustrate the difference, I’ve created a side-by-side comparison [pictured above] that shows how the numbers work out when you apply current rates, the correct CMHC premium (including the 0.20% surcharge), and a 30-year amortization for both cases.

What’s the Bottom Line?

• A longer amortization means a lower monthly payment—but potentially more interest paid over time.
• Insured mortgages may have better rates, but come with added insurance costs.
• Even with a lower rate, the total loan size is bigger when insurance is added.
• Your ideal mortgage structure depends on your savings, monthly budget, and long-term plans.

Let’s Talk About What’s Right for You

Every client I work with has a unique situation—and I’m here to help you make sense of your options.

If you're thinking about buying your first home (or getting back into the market), I’ll walk you through:

• Whether you qualify for the 30-year amortization
• How insured vs uninsured rates compare
• What your monthly payments would look like
• The pros and cons of each strategy, in real terms

There’s no cost to talk, and no pressure. I’m here to help you make confident, informed decisions with your mortgage—and give you the clearest path forward.

Let me know when you're ready to run the numbers together.