There is big news for Canadian homebuyers: the federal government has expanded access to the 30-year amortization for those putting down less than 20%. Previously, the longer amortization option was only available to first-time buyers purchasing newly built homes. Now, the rules are more accessible – read on or watch my video to find out how this applies to you!
What Does This Mean for Buyers?
First time home-buyers can now apply for 30-year amortization no matter what type of home they are purchasing – new-build or resale! On the other hand, repeat buyers can access 30-year amortizations by purchasing a new-build home.
This change could open up opportunities for many buyers by allowing them to spread their mortgage payments over 30 years, lowering monthly costs and enabling them to qualify for more expensive properties. However, it’s important to consider the long-term financial impact.
30-Year Amortization – The Downsides
While the monthly payments may be lower on a longer amortization, there are some drawbacks.
- You will end up paying more in mortgage insurance.
- The biggest issue is the amount of interest you’ll pay over the life of the loan. With a longer amortization, you’ll spend significantly more on interest compared to a 25-year term. This makes it essential to weigh the short-term affordability against the long-term costs.
Should You Choose a 30-Year Amortization?
Is this option is the right financial decision for you? While it may help you afford a more expensive home, the additional interest costs may outweigh the benefits.
Please reach out with any questions regarding the Canadian government’s announcements. If you’re looking to get pre-approved for a mortgage to buy a property in Edmonton, fill out my online application. I’m here to help you every step of the way.
About Jason Scott, Edmonton Mortgage Broker
Looking for a personalized mortgage solution? As an Edmonton Mortgage Associate, I’ll be your trusted partner who will help you get the right mortgage for your family home or Investment property. I’m Jason Scott, and I’ll be your Mortgage Broker in Edmonton.
