25 years or 30: the longer amortization isn't open to everyone.

Effective for mortgage insurance applications submitted on or after December 15, 2024, the federal government expanded eligibility for 30-year amortizations on insured mortgages to all first-time homebuyers and all buyers of newly constructed homes. The measure applies to borrowers requiring high loan-to-value mortgage insurance — where the total loan-to-value exceeds 80% — and was announced alongside a separate increase in the insured mortgage price cap to $1.5 million.

The two changes were designed to work together: a higher price cap widens the pool of homes that can still be bought with a small down payment, and the longer amortization softens the monthly payment on that larger insured loan. A broker working with a first-time buyer in a higher-priced market should check both eligibility tests at once, since either one changes what the client can actually qualify for.

• →The borrower has never purchased a home before, or
• →In the last four years, the borrower has not occupied a home as a principal residence that they or their current spouse or common-law partner owned, or
• →The borrower recently experienced the breakdown of a marriage or common-law partnership, following the same approach the Canada Revenue Agency uses for the Home Buyers' Plan.

A newly constructed home similarly has a specific test: it must not have been previously occupied for residential purposes, though this doesn't exclude a new condominium unit with an interim occupancy period.

The recently-separated criterion tends to surprise clients most: someone who owned a home for a decade with a former spouse, and hasn't owned since the relationship ended, can still qualify as a first-time buyer under this rule — it follows the same approach CRA already uses for the Home Buyers' Plan, so a broker can lean on that existing framework when explaining it.

An insured borrower who doesn't meet either the first-time-buyer or new-build test is still held to the standard 25-year maximum, regardless of the mortgage's size. A repeat buyer purchasing a resale home with less than 20% down, for example, doesn't get access to the 30-year option no matter how large or small the mortgage is.

A longer amortization spreads payments over more years, which lowers the required monthly payment — but it also means more years of interest accruing on the outstanding balance, which raises the total interest paid over the life of the mortgage.

For a client stretching to qualify, the lower payment on a 30-year amortization can be the difference between qualifying and not — which is exactly the scenario the rule was designed for. For a client who could comfortably afford the higher 25-year payment, the 30-year option mainly just adds cost without adding purchasing power.

Run the actual monthly-payment and total-interest numbers side by side for the client's specific loan amount and rate — the gap is easier to see in dollars than as an abstract concept. See GDS and TDS, worked for how a longer amortization also affects the qualifying ratios on a file. Files that hinge on this eligibility test are exactly where Treadstone's underwriting support earns its keep, confirming first-time-buyer or new-build status cleanly before the file goes to the insurer.

It's also worth flagging that a client isn't locked into 30 years just because they qualify for it — nothing stops a first-time buyer from choosing a 25-year amortization and the lower total interest that comes with it, if their budget can support the higher payment. The 30-year option is an eligibility door opened wider, not an obligation to walk through it.