25-year or 30-year amortization: what is the real difference?
Quick summary
Amortization is how many years it would take to pay off the whole mortgage. A longer one means a smaller payment each month and more interest in total. Since December 15, 2024, first-time home buyers and buyers of new builds can get 30-year amortization on insured mortgages. On $500,000 at an example rate of 5%, 30 years lowers the payment by about $240 a month and adds about $88,000 in interest. Try your own numbers in the mortgage payment calculator.
Checked November 10, 2026. Main source: Department of Finance Canada: The boldest mortgage reforms in decades come into force today (December 15, 2024, read November 10, 2026). See all 1 source.
Key facts
- 30-year insured amortization
- First-time home buyers and buyers of new builds
- Source: Finance Canada, December 15, 2024
- Example payment, $500,000 at 5%
- About $2,908 a month over 25 years, $2,668 over 30
- Source: Our calculation
- Example extra interest
- About $88,236 more over 30 years than over 25
- Source: Our calculation
A worked example on $500,000
These figures are our own calculation to show the trade-off. They are not a quote. We assumed a fixed rate for the whole amortization, monthly payments and semi-annual compounding. Your rate, term and lender will change the numbers.
| Example rate | Amortization | Monthly payment | Total interest |
|---|---|---|---|
| 4% | 25 years | $2,630 | $289,030 |
| 4% | 30 years | $2,378 | $355,934 |
| 5% | 25 years | $2,908 | $372,407 |
| 5% | 30 years | $2,668 | $460,643 |
At 5%, 30 years lowers the payment by about $240 a month and adds about $88,236 in interest. At 4% the figures are about $253 and $66,904. Real rates reset at each renewal, so total interest over the full amortization will differ.
Who can get a 30-year amortization on an insured mortgage
Finance Canada says that from December 15, 2024, first-time home buyers and buyers of new builds can take out insured mortgages with 30-year amortization periods. It says this lowers monthly payments by hundreds of dollars.
The page covers insured mortgages. We did not find what lenders offer on other mortgages, so ask your lender.
Source: Department of Finance Canada: The boldest mortgage reforms in decades come into force today (December 15, 2024, read November 10, 2026).
How to think about the choice
- A lower payment gives more room in your monthly budget and may help you qualify. See the stress test.
- A longer amortization costs more interest over time, as the table shows.
- You can ask whether your lender lets you make extra payments, which shortens the time to pay off.
- At renewal you may be able to change the amortization. Ask your lender.
Questions people ask
What is mortgage amortization?
The number of years it would take to pay off the whole mortgage. It is different from the term, which is the length of your contract with the lender.
Can I get a 30-year amortization in Canada?
Finance Canada says first-time home buyers and buyers of new builds can on insured mortgages since December 15, 2024. Ask your lender about other cases.
How much more interest does 30 years cost?
In our example on $500,000 at 5%, about $88,236 more than 25 years. Your numbers will differ.
Is a longer amortization a bad idea?
It lowers the payment and raises total interest. Which fits depends on your budget and goals.
Does your province have its own rules?
Taxes and fees on a home purchase, and some programs for first-time buyers, differ by province. Pick yours to see where to look. We remember your choice on this device only.