Planning5 min read
25-Year vs 30-Year Amortization
Total cost, monthly payment, and eligibility.
Amortization is how long it takes to pay off your mortgage. The two common choices in Canada are 25 and 30 years — each with trade-offs.
Who qualifies for 30 years
- Uninsured mortgages (20%+ down)
- First-time buyers (insured, since Dec 2024)
- Buyers of newly built homes (insured)
Monthly payment comparison
On a $500,000 mortgage at 5%: 25-year payment ≈ $2,908. 30-year payment ≈ $2,668. You save about $240/month with 30 years.
Total interest comparison
Over the life of the loan: 25-year total interest ≈ $372,000. 30-year ≈ $461,000. The 30-year costs roughly $89,000 more in interest.
How to get the best of both
- Take the 30-year for cash-flow flexibility
- Use annual lump-sum prepayment privileges (typically 15–20%) to act like a 25-year
- Increase scheduled payments anytime within the privilege limit
Key takeaways
- 30 years = lower payment, more total interest
- 25 years = higher payment, less interest, faster equity
- Prepayment privileges let you shorten any amortization
- Eligibility for 30-year insured is limited
Sources used
Disclaimer: This guide is for educational purposes only and does not constitute financial, mortgage, legal, or tax advice. Always verify details with qualified professionals and financial institutions.