Why does 30 years cost so much more interest?

On $400k at 5.5%, you pay $336,905 in total interest over 25 years versus $417,616 over 30 years. The ~$80,711 gap comes from leaving principal accruing interest for 5 more years.

Is 30-year amortization available to everyone in Canada?

No. Historically it required a ≥20% down payment (uninsured loan). Since the 2024 CMHC rule, first-time buyers can get a 30-year insured loan with less down — under specific conditions (owner-occupied purchase, never been a homeowner). An AMF-licensed broker in the Courteo network will check eligibility.

Can I take 30 years and accelerate payments?

Yes with most Canadian lenders — typical prepayment privileges: double-up payments, annual lump sum of 10-20% of balance, regular PMT increase. This combines 30-year flexibility (income dips) with 25-year interest savings (steady state).

Does amortization change at renewal?

Yes — each 5-year term mechanically reduces the remaining amortization by 5 years. Starting at 25 leaves 20 at first renewal, 15 at second, etc.

Editorial guide

25 or 30-year amortization? What the numbers really say.

30 years means lower monthly PMT — but much more total interest. The right amortization length depends less on the market average than on your monthly margin and retirement horizon.

1. The numbers, plain

A textbook case: $400,000 mortgage, 5.5% fixed. We compare 25 vs 30 years amortization, no CMHC insurance, no fees, no prepayments.

Assumptions: $400,000 initial principal, 5.5% fixed held for the entire term, monthly payments, no prepayments.
Metric	25 years	30 years	Gap
Monthly payment	$2,456	$2,271	−$185
Total interest (full term)	$336,905	$417,616	+$80,711
Interest paid over 5 years	$104,467	$106,112	+$1,645
Total paid over full term	$736,905	$817,616	+$80,711

Reading: you save roughly $185/month by taking 30 years, but you pay about $80,711 more total interest over full life. That is the price of monthly flexibility.

2. 2024 rule: 30 years for first-time buyers

Conventional loan (≥20% down): 30 years allowed at most lenders.
Standard CMHC insured loan: 25 years max.
2024 CMHC rule — first-time buyers: 30 years on insured loan allowed for buyers who never owned a home, buying to occupy, subject to income/price conditions.

3. Verdict by profile

First-time buyer tight on payment

30 years

If the 25-year payment chokes your budget, saving ~$170/mo on $400k at 5.5% is worth the long-term interest cost. Better to hold the loan than lose the house.

First-time buyer with margin

25 years (long-term savings)

If the 25-year payment fits comfortably, you save roughly $90k in total interest on $400k at 5.5%. You can also take 30 years + prepayments to combine flexibility and savings.

Rental investor

30 years (cash-flow > principal)

In rental real estate, monthly positive cash-flow beats principal-paydown speed. Lower PMT improves running yield and liquidity for the next acquisition.

Pre-retiree 55-60

25 years (clear before retirement)

At this age, the goal is entering retirement mortgage-free. 30 years pushes residual debt into your 80s. 25 frees you by 80-85, 20 better if PMT allows.

4. Frequently asked questions

Why does 30 years cost so much more interest?: On $400k at 5.5%, you pay $336,905 in total interest over 25 years versus $417,616 over 30 years. The ~$80,711 gap comes from leaving principal accruing interest for 5 more years.
Is 30-year amortization available to everyone in Canada?: No. Historically it required a ≥20% down payment (uninsured loan). Since the 2024 CMHC rule, first-time buyers can get a 30-year insured loan with less down — under specific conditions (owner-occupied purchase, never been a homeowner). An AMF-licensed broker in the Courteo network will check eligibility.
Can I take 30 years and accelerate payments?: Yes with most Canadian lenders — typical prepayment privileges: double-up payments, annual lump sum of 10-20% of balance, regular PMT increase. This combines 30-year flexibility (income dips) with 25-year interest savings (steady state).
Does amortization change at renewal?: Yes — each 5-year term mechanically reduces the remaining amortization by 5 years. Starting at 25 leaves 20 at first renewal, 15 at second, etc.