First-time buyers of new construction homes in Canada now have access to longer mortgage amortization periods. As of this month, lenders can offer 30-year amortizations for insured mortgages to first-time homebuyers of newly constructed homes.
This change extends the previous maximum amortization period for insured mortgages from 25 years to 30 years. Insured mortgages, which require mortgage insurance due to a down payment of less than 20%, will benefit from this extended period.
However, homes priced at $1 million or more still require a 20% down payment and an uninsured mortgage loan. The federal government introduced this measure to lower monthly mortgage payments, making housing more affordable for young Canadians while also encouraging the construction of much-needed housing supply.
What You Need to Qualify for a 30-Year Amortization on New Builds
If you’re a first-time buyer considering a new construction home with a 30-year mortgage, here are the key requirements you’ll need to meet:
· At least one of the borrowers must be a first-time homebuyer — meaning they’ve never purchased a home before and haven’t occupied a home as a principal residence that they or their current spouse or common-law partner have owned in the last four years.
· The home must be newly constructed and not previously occupied for residential purposes.
· The mortgage must be high-ratio, with the loan amount exceeding 80% of the home price (requiring a down payment of less than 20%).
· All other eligibility criteria for government-guaranteed mortgage insurance will still apply.
· This 30-year amortization for insured new build mortgages was first announced in the 2024 federal budget, as part of broader efforts to improve housing affordability in Canada.