Mortgage Guide
Since December 15, 2024, some buyers with less than 20% down can stretch an insured mortgage to 30 years. Here is who qualifies, what it costs, and how it changes what you can borrow.
A 30-year amortization lowers your monthly payment and lets the same income qualify for a larger insured mortgage. Since December 15, 2024, it has been open to first-time buyers and to anyone buying a newly built home, even with less than 20% down. The catch is that "first-time buyer" here has its own definition, the insurance premium goes up, and you pay interest for five more years.
This guide sets out the rule as the Department of Finance wrote it, shows the cost with plain arithmetic, and flags the places where buyers in Richmond and across Metro Vancouver get tripped up.
When your down payment is under 20%, your mortgage must be insured, and the insured amortization used to top out at 25 years for most buyers. The Financial Consumer Agency of Canada's mortgage terms and amortization page now gives the maximum for a down payment under 20% as:
With 20% or more down, the mortgage is uninsured and, in FCAC's words, "your lender sets your maximum amortization period." So the federal change matters most to people buying with a small down payment, which in this region usually means a first condo or townhouse.
The Department of Finance's backgrounder on the reforms sets two conditions together: the total loan-to-value is greater than 80%, and the borrower is either a first-time homebuyer or purchasing a newly constructed home. It applies to insurance applications submitted on or after December 15, 2024, the same day the insured price cap rose to $1.5 million according to the Department of Finance.
For this rule, the backgrounder says a borrower qualifies if any one of these is true:
The second test catches many people who think they are out. If you owned a condo years ago, sold it, and have rented for more than four years, you may count as a first-time buyer again for the 30-year amortization. The third test is the one most articles leave out entirely. Someone who owned a home with a former spouse can qualify after a separation, even inside the four-year window.
BC's property transfer tax exemption uses a much stricter rule: you must never have owned an interest in a principal residence anywhere in the world. So a buyer can qualify for a 30-year amortization under the federal test and still pay full property transfer tax. Our first time home buyer exemption guide walks through the provincial conditions. Check each program separately, because each has its own definition.
The backgrounder speaks of "the borrower." It does not spell out how a lender or insurer treats a couple where only one person meets the test. That is decided under the insurer's and lender's own guidelines, so ask the question before you write an offer, not after.
If the home is newly constructed, you do not need to be a first-time buyer at all. The Department of Finance definition is short: "The new home must not have been previously occupied for residential purposes." It then adds a line that matters a great deal in Metro Vancouver: the requirement "is not intended to exclude newly constructed condominiums where there has been an interim occupancy period."
Interim occupancy is the stretch when a presale buyer moves into a finished condo before the strata plan is registered and the purchase closes. Under the federal wording, that period does not disqualify the unit as a new build. If you bought a presale years ago and are now arranging the mortgage for completion, this is the clause to point to. The lender and insurer still make the final call on each file.
A resale home that someone has already lived in does not qualify as a new build, however new it looks.
A longer amortization costs more in two ways.
Assume a $650,000 home. The federal minimum down payment is 5% of the first $500,000 plus 10% of the remaining $150,000, which is $40,000. That leaves a base loan of $610,000, about 93.8% loan-to-value, which falls in CMHC's 4.00% premium band. We use a hypothetical 4.00% rate, compounded semi-annually and held for the whole amortization. That rate is chosen only to make the arithmetic readable. It is not an offer or a forecast.
| 25-year amortization | 30-year amortization | |
|---|---|---|
| Premium rate | 4.00% | 4.20% (4.00% + 0.20%) |
| Premium added to loan | $24,400 | $25,620 |
| Insured loan | $634,400 | $635,620 |
| Monthly payment | $3,337.07 | $3,022.49 |
| Interest paid in first 5 years | about $118,100 | about $120,300 |
| Balance after 5 years | about $552,300 | about $574,600 |
| Total interest over the full amortization | about $366,700 | about $452,500 |
The longer amortization saves roughly $315 a month. In exchange, the premium is $1,220 higher, you owe about $22,300 more when your first five-year term ends, and total interest is about $85,800 higher if nothing else changes. Real rates will differ and will change at each renewal, so treat this as a picture of the trade-off, not a prediction. You can rerun it with your own numbers in our mortgage payment calculator.
Lenders size your mortgage from your debt service ratios, and the payment in those ratios is calculated at the stress-test qualifying rate, not your contract rate. Our mortgage stress test guide explains how that rate is set. Stretching the amortization lowers that notional payment, so the same income supports a bigger loan.
A rough illustration: suppose your income leaves room for $4,000 a month of principal and interest at a hypothetical 6.00% qualifying rate. Over 25 years, that payment supports a mortgage of about $625,200. Over 30 years, it supports about $672,500. That is roughly $47,300 more borrowing power from the same budget, before the lender's other checks. Try your own figures in the affordability calculator.
The extra room is real, but it is also the reason to be careful. A larger loan over a longer period is a bigger commitment. Make sure the payment fits your actual monthly budget, not just the ratios.
Choosing 30 years at purchase does not lock you into paying for 30 years. FCAC's page on paying off your mortgage faster lists the usual tools: increasing your regular payment, making lump-sum payments, switching to an accelerated weekly or biweekly schedule, and keeping your payment the same when you renew at a lower rate. Every contract caps how much you can prepay each year, and FCAC notes that going over the limit triggers a prepayment penalty, so read the prepayment section of your commitment letter.
Some buyers take the 30-year amortization for a lower required payment and then pay extra when cash flow allows. That keeps a safety margin in a tight month. It only works if the extra payments actually happen.
It tends to suit buyers who:
It suits you less if you can comfortably qualify at 25 years, or if the larger loan would only push you to a higher price than you planned. Our first-time buyer mortgage page covers the wider purchase process, and a pre-approval will show both amortizations side by side for your file.
Since December 15, 2024, an insured mortgage can be amortized over 30 years if the borrower is a first-time homebuyer or is buying a newly constructed home, and the loan-to-value is above 80%. Everyone else with less than 20% down is limited to 25 years.
The Department of Finance uses three tests, and you need to meet only one: you have never purchased a home, you have not lived in a home you or your current spouse or partner owned in the last 4 years, or you recently went through the breakdown of a marriage or common-law partnership.
Usually the unit counts as a new build. The federal definition says the home must not have been previously occupied for residential purposes, and it states that this is not intended to exclude newly constructed condominiums where there has been an interim occupancy period. Your lender and insurer still decide each file.
Yes, in two ways. CMHC adds a 0.20% surcharge to the insurance premium rate when the amortization is beyond 25 years, and you pay interest for five more years, which can add tens of thousands of dollars over the life of the mortgage.
With 20% or more down, the mortgage is uninsured and FCAC says your lender sets the maximum amortization period. The federal first-time buyer and new-build conditions apply to insured mortgages.
Rules as of October 2026, from the Department of Finance Canada, FCAC and CMHC. Examples use hypothetical rates and are arithmetic, not quotes.
This is general information, not financial advice. Speak to a licensed mortgage professional about your situation.
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