25-Year vs. 30-Year Mortgage

June  2025 | 25-Year vs. 30-Year Mortgage

If you’re thinking about buying a home, one of the biggest decisions you’ll face is choosing your mortgage’s amortization period. Should you go for the traditional 25-year mortgage or take advantage of the newer, longer 30-year option? Let’s break it down in a way that makes sense for Alberta’s unique market!

What is Mortgage Amortization?

First things first: Mortgage “amortization” is simply the total time you have to pay off your mortgage. It’s different from your mortgage “term,” which is how long your interest rate is locked in (like a 5-year fixed rate). In Alberta, most homebuyers have been choosing 25-year amortization for years, but recent changes mean many first-time buyers and new construction buyers can now opt for a 30-year mortgage, even with less than a 20% down payment.

25-Year Mortgage: Pros and Cons

With a 25-year mortgage, you’ll pay off your home faster and build equity more quickly. This means less interest paid over the life of your loan—a big win for your wallet! However, your monthly payments will be higher, so you’ll need to be confident in your income and budget. For Albertans with stable jobs and a desire to be mortgage-free sooner, the 25-year option is a solid choice.

30-Year Mortgage: Pros and Cons

A 30-year mortgage, on the other hand, gives you lower monthly payments. This can be a game-changer for first-time buyers or anyone who wants a bit more flexibility in their budget, especially important in Alberta’s dynamic job market. The trade-off? You’ll pay more interest overall, and it’ll take longer to own your home outright. But with recent rule changes, more Albertans than ever can access 30-year insured mortgages, making it easier to qualify for that dream home.

Which One Should You Choose?

Here’s a quick comparison:

• 25-Year Mortgage: Faster equity, less interest, higher payments.
• 30-Year Mortgage: Lower payments, more interest, easier to qualify.

If you’re a first-time buyer or want more breathing room in your budget, the 30-year mortgage might be your best bet. If you’re focused on long-term savings and want to pay off your home sooner, the 25-year option could be the way to go.

Alberta-Specific Tips

Remember, you can always make extra payments on a 30-year mortgage to pay it off faster; many Alberta lenders allow this without penalty. And with Alberta’s strong job market and recent rule changes, both options are more accessible than ever.

Final Thoughts

No matter which you choose, it’s always a good idea to chat with a local mortgage professional. They can help you explore your options and find the perfect fit for your Alberta homebuying journey!