Compare monthly payments, CMHC insurance premiums, total interest paid, and break-even analysis between a 25-year and 30-year amortization — including the CMHC surcharge for 30-year insured mortgages.
As of August 2024, 30-year insured amortizations are available to first-time home buyers purchasing any property, or any buyer purchasing a newly built home (new construction). Existing homeowners purchasing a resale home who are not first-time buyers cannot access a 30-year insured amortization — they are limited to 25 years for insured mortgages.
CMHC adds a 0.20% surcharge to the standard insurance premium for any insured mortgage with a 30-year amortization. For example, a buyer with 10% down normally pays a 3.10% premium. On a 30-year amortization, that rises to 3.30%. The surcharge is added to the mortgage and amortized — so its immediate impact on your monthly payment is modest, but it increases total interest paid over the life of the loan.
It rarely does on a pure lifetime basis — the extra interest paid over 30 years typically vastly exceeds the cumulative monthly savings. However, if you invest the monthly savings at a reasonable rate of return, the math can shift. The break-even shown here calculates how many months of payment savings are needed to offset the extra CMHC surcharge — it does not account for the ongoing interest differential, which continues to accumulate.
Yes. At renewal, you are free to negotiate any amortization up to your remaining term. If you started with a 30-year amortization and have paid 5 years, you could renew for 20 or 25 years instead — reducing total interest paid significantly. This is a common strategy: use the 30-year for lower initial payments, then accelerate at renewal.