Canadian Mortgage Calculator · Practical guide
25 Year vs 30 Year Amortization in Canada
Stretching to 30 years lowers the payment but costs tens of thousands more in interest over the life of the loan.
At a glance
The short answer
On a $400,000 home with 20% down (a $320,000 loan) at 4.9%, a 25-year amortization costs about $1,843 per month versus $1,689 for 30 years — a $154 monthly saving that costs roughly $55,000 more in total interest.
| $320,000 Loan at 4.9% | 25 Years | 30 Years |
|---|---|---|
| Monthly payment | $1,843 | $1,689 |
| Total of all payments | $552,888 | $607,951 |
| Total interest | $232,888 | $287,951 |
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Enter your own values, then compare the result with the examples below.
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Who can choose 30 years
In Canada, insured mortgages with less than 20% down are generally capped at a 25-year amortization. The 30-year option mainly applies to conventional borrowers with 20% or more down — which is why the example above uses a $400,000 home with $80,000 down and no CMHC premium.
The trade-off in plain terms
The 30-year schedule frees up about $154 per month — useful for qualifying ratios or monthly cash flow. But because the balance shrinks more slowly, interest compounds on a larger principal for longer, adding about 24% to the total interest bill. Both figures above use the Canadian semi-annual compounding convention.
A middle path
Many borrowers take the 30-year amortization for flexibility, then use prepayment privileges to pay like a 25-year schedule. That keeps the required payment low while still saving most of the interest — a useful hedge if your income is variable.
Frequently Asked Questions
Can first-time buyers get a 30-year amortization in Canada?
Recent rule changes allow 30-year amortizations for insured mortgages on new builds and for some first-time buyers, but the traditional cap for insured loans is 25 years. Conventional loans with 20% down commonly offer 30.
Does a longer amortization change my interest rate?
Usually not the rate itself, but lenders sometimes price 30-year amortizations slightly higher. The bigger cost is the extra five years of interest on the balance.
Can I shorten my amortization later?
Yes, at renewal you can typically choose a shorter remaining amortization, and prepayment privileges let you reduce it effectively at any time. Extending it usually requires refinancing.
How much faster does the balance fall on a 25-year schedule?
Meaningfully faster. On the example loan, the higher payment directs roughly $154 more per month to principal from day one, and the gap in remaining balance widens every year.