Big News for First-Time Homebuyers: 30-Year Amortizations Are Here!

Posted On Dec 04, 2024

Starting December 15, 2024, first-time homebuyers in Canada will be eligible for a 30-year amortization on their mortgages. This extended period could be a game-changer, making monthly payments more manageable and increasing how much buyers can qualify for—both crucial benefits in today’s competitive housing market.

Lower Monthly Payments

A longer amortization spreads mortgage payments over 30 years instead of 25, reducing the amount owed each month. For example, on a $450,000 mortgage at a 4.39% interest rate:

• 25-year amortization: $2,456/month
• 30-year amortization: $2,221/month

That’s a monthly savings of $235, or over $2,800 annually—extra cash that can go toward other expenses or savings.

Higher Borrowing Power

Reduced monthly payments can also help buyers qualify for higher mortgage amounts. With the same income, a buyer might qualify for an additional $50,000 or more, opening up opportunities in markets where every dollar counts.

What This Means for You

This change offers first-time buyers more flexibility and affordability, making it easier to enter the market. While it’s important to consider the long-term cost of paying more interest over time, the immediate benefits are hard to ignore.

If you’re planning to buy your first home, this is the perfect time to review your budget and speak with a mortgage professional. The dream of homeownership may now be closer than you think!