How the New 30-Year Amortization Rule Is Reshaping First-Time Homeownership in Canada

In 2025, Canada’s mortgage landscape underwent a meaningful shift to address affordability: first-time buyers purchasing newly built homes can now access 30-year amortization terms on insured mortgages.

first-time buyers

This policy change is designed to ease the entry barrier for homeownership — particularly in British Columbia and Alberta, where rapidly rising home prices have put additional pressure on younger buyers. But like any financial tool, it brings both opportunities and trade-offs.

What Changed?

Previously, insured mortgages in Canada were capped at a 25-year amortization. Longer terms were available only to borrowers putting down at least 20% — resulting in uninsured mortgages.

Now, first-time buyers who put down less than 20% and purchase a newly built home may choose a 30-year amortization, provided the mortgage is insured by CMHC, Sagen, or Canada Guaranty.

The longer term allows for lower monthly payments and greater purchasing power, but it’s still subject to Canada’s mortgage stress test.

Why It Matters in 2025

In places like Surrey, Abbotsford, and Edmonton, where real estate remains competitive despite recent cooling trends, the 30-year amortization can make or break a buyer’s ability to qualify for their first home.

With interest rates slowly declining, a longer term helps:

  • Lower your monthly obligation
  • Increase the mortgage amount for which you qualify
  • Offer budget flexibility, especially for single-income or self-employed households

For example, a buyer in Abbotsford purchasing an $875,000 new build with 10% down could reduce their monthly payment by over $450 simply by opting for 30 years instead of 25.

Trade-Offs: Lower Payments, More Interest

The major downside to a 30-year amortization is the additional interest paid over the life of the loan. Stretching your mortgage term adds years of interest accumulation and slows equity growth — especially in the early years.

That said, some buyers plan to start with 30 years for flexibility, then make lump-sum payments or refinance to a shorter term once their income grows.

Who Benefits Most?

This change helps a wide range of first-time buyers:

  • Young families balancing housing with child care expenses
  • Self-employed professionals navigating qualification hurdles
  • Buyers entering high-cost areas like Surrey or Langley, where entry-level new builds often exceed $800,000
  • Alberta residents in Edmonton, where rising demand is tightening entry-level inventory

In these markets, the 30-year option is already helping buyers move from "not quite qualified" to "approved."

Risks and Considerations

The 30-year amortization isn’t for everyone. It may not be ideal if:

  • You have a stable income and can afford the higher payments of a 25-year term
  • You want to build home equity quickly
  • You’re planning to sell or refinance within a short period

First-time buyers need to weigh the monthly savings against the long-term financial implications. Working with a mortgage advisor is key to understanding the break-even point and potential future refinancing options.

How Brokers Are Adapting

Mortgage brokers across British Columbia and Alberta are actively helping buyers navigate this change by:

  • Providing pre-approvals under both 25- and 30-year scenarios
  • Working closely with builders to identify eligible homes
  • Structuring payment plans that allow room for prepayment
  • Identifying insurance-friendly lenders for complex applications

A firm like Sandhu & Sran Mortgages, which serves clients in Abbotsford, Surrey, and Edmonton, is well-positioned to guide first-time buyers through the full process — from qualification to move-in and beyond.

Final Word

The new 30-year amortization rule is more than a headline — it’s a real lever for change in a challenging housing market. For many buyers, it brings long-awaited breathing room. For others, it offers a calculated entry into a high-cost region without derailing long-term goals.

If you’re a first-time buyer in 2025, or advising one, don’t assume more years equals less sense. With a personalized plan, this policy shift can be the foundation of a smart, sustainable path to homeownership — especially in BC and Alberta’s dynamic markets.

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