The short answer
Who qualifies
For an insured loan (down payment under 20%), according to CMHC:
- at least one borrower is a first-time buyer, or the home is new and never occupied;
- the price is under $1,500,000;
- the borrower lives in the home;
- the credit score is at least 600.
A 0.20 point surcharge is added to the insurance premium on 30 years: 4.20% instead of 4.00% at 5% down. An uninsured loan (20% or more) may be offered over 30 years depending on the lender’s policy.
What it changes, in numbers
| $400,000 loan at 4.5% | 25 years | 30 years |
|---|---|---|
| Monthly payment | $2,214 | $2,017 |
| Payment difference | −$197 a month | |
| Total interest | about $264,200 | about $326,100 |
| Extra interest | about $61,900 |
Shortening it later
Contracts often allow prepayments or a higher payment. Ask me for the lender’s limits before you sign.
Frequently asked questions
Does 30 years help with the stress test?
Yes, a lower payment raises the amount you qualify for.
Can I go from 30 to 25 years?
Yes, at renewal or with extra payments, depending on the contract.
Does 30 years change the rate?
Not always. The insurance premium does rise by 0.20 point.