30 Year Amortization for First Time Homebuyers

For many Canadians, owning a home feels increasingly out of reach. One potential solution that’s gaining attention is the option for a 30-year mortgage amortization. But what does this mean for you?

What Is a 30-Year Amortization?

A mortgage amortization period is the length of time it takes to fully pay off your mortgage. Currently, most insured mortgages in Canada are limited to a maximum of 25 years. A 30-year amortization, typically available for uninsured mortgages, would spread payments out over a longer time which allows for increased affordability or greater purchasing power.

The Benefits

• Lower Monthly Payments: Extending your amortization period reduces your monthly payments, making homeownership more affordable upfront.

• Increased Flexibility: Lower payments can provide financial breathing room, especially during uncertain economic times.

The Trade-Offs

• Higher Interest Costs: Over a longer period, you’ll pay more interest overall.

• Slower Equity Building: It takes longer to build equity in your home compared to a shorter amortization.

Is It Right for You?

A 30-year amortization can be a helpful option if cash flow is a concern, but it’s essential to weigh the long-term costs. A conversation with your mortgage advisor can help you decide. Its good to remember, that just because you have a 30 year amortization on the application, does not mean you have to take 30 years to pay the mortgage down, I can show you easy short cuts.

Important: This program is only for first-time homebuyers—those who have never owned a home or been on title to a property. They can qualify for a 30-year amortization with less than a 20% down payment.

If you think this is an option you would like to explore, call me.