New Mortgage Rules: 30‑Year Amortizations & Higher Insured Caps — How to Use Them Wisely

The highlights: Affordability tools for first‑time buyers and new builds

Recent federal reforms deliver two major changes:

• 30‑year amortizations are now available to all first‑time homebuyers and to all buyers of newly built homes, reducing monthly payments versus 25 years. (Effective Dec 15, 2024.)

• The insured mortgage price cap increased to $1.5M (from $1.0M) to reflect market realities, enabling more purchases with <20% down under default insurance. (Effective Dec 15, 2024.)

Budget 2024 first introduced 30‑year amortizations for first‑time buyers of new builds (effective Aug 1, 2024), later expanded in September’s update.

What a 30‑year amortization really does

• Extending amortization lowers monthly payments—often 8–10% vs. 25 years—but slows equity build and increases total interest over the life of the loan.

• CMHC added a 20 bps premium surcharge for eligible insured loans using 30 years (effective Aug 1, 2024), reflecting capital impacts. Factor this into your cost comparisons.

Who qualifies and where the cap matters

• Eligibility: First‑time buyers (as defined under FHSA/HBP rules) for any property and any buyer of a new build can access 30‑year amortizations under insured lending.

• Cap at $1.5M: High‑ratio insured purchases can now go up to $1.5M—broadening access in cities with higher prices.

Smart ways to use the new rules

1. Pair 30‑year amortization with prepayment discipline: Set calendar reminders for annual lump‑sum payments or payment‑frequency increases; this offsets slower equity build while keeping the safety of lower required payments.

2. Plan for renewal risk: If rates rise in future cycles, a longer amortization gives payment flexibility; just remember the total interest trade‑off.

3. Compare insured vs. uninsured: In some price brackets, insured loans (even with premiums) can produce lower rates than uninsured, especially after the cap increase. Have your broker model both scenarios.

Thinking about a new build or entering the market as a first‑time buyer? I can build a side‑by‑side plan comparing 25‑ vs. 30‑year amortizations, insured vs. uninsured, and prepayment strategies.