Long Amortizations Survive…With 20% Down

Amortization-ComparisonWhen the government cut maximum amortizations in 2008 and 2011, most big lenders reduced amortizations on all of their mortgages.

They didn’t need to apply the changes to uninsured mortgages, but many did anyway.

Not this time.

When the Department of Finance trimmed the insured amortization limit to 25 years on July 9, most lenders left their conventional mortgage amortizations at 30-35 years.

Even the major banks have left 30-year amortizations in place, which surprised many of us in the business.

In any event, what follows is a current list of amortization policies from some of the country’s largest lenders.

These are the longest available amortizations at each lender, assuming you’re getting a prime mortgage and putting down 20% or more.

MAXIMUM: 35 YEARS

  • B2B Bank
  • Coast Capital (B.C. only)
  • Laurentian Bank
  • Moncana Bank
  • Vancity (B.C. only)

MAXIMUM: 30 YEARS

  • ATB Financial (AB only)*
  • BMO
  • Canadiana Financial
  • CIBC
  • First Calgary Savings
  • First National
  • Home Trust
  • ICICI Bank
  • Industrial Alliance
  • Manulife Bank
  • MCAP
  • Meridian Credit Union (ON only)
  • Merix Financial
  • National Bank
  • Radius Financial (Raised to 30 in Oct 2012)
  • RBC
  • RMG Mortgages (Dropped to 30 in Oct 2012)
  • Scotiabank
  • Servus Credit Union (AB only)
  • Street Capital
  • TD

MAXIMUM: 25 YEARS

  • Bridgewater Bank
  • Desjardins
  • ING Direct (30 optional if client qualifies at 25)

Keep in mind, there may be exceptions to the above. Those exceptions may be based on the term of the mortgage, conditions related to specific promotions, or the type of mortgage (e.g., some lenders’ equity mortgages or cashback mortgages may have lower amortization limits).

Mortgage-PaymentsAs you can see from the screenshot at the top of this story, the payment difference between a 25-, 30- and 35-year mortgage is often not chump change. Folks who want to minimize their payments and allocate cashflow to other uses may find the first five lenders compelling. Those lenders, in turn, will enjoy a market advantage because of their flexibility.

If you know of other large lenders that should be added to the list, email us and we’ll post them.


* Exceptions to 35 years may be considered by ATB Financial with a large down payment.


Amortization Comparison:  The above screenshot comes from CMHC’s mortgage comparison tool. Here’s the link.


Rob McLister, CMT

  1. Rob, Excellent report again. Landlords and property investors want and need long amortizations because it helps their cash flow and the interest expense deduction.
    Government and regulators are just rattling the lions cage when they interfere in the uninsured mortgage business. If they keep it up, eventually someone’s arm will get bitten off.

  2. To add to the list, if the loan in conventional and the clients pays an insurance premium (can be capped), there are lenders that still do 40yr amortization’s on the A side. No rate premiums, and you qualify using the 40yr am as well.

  3. A few weeks ago I posted that the bank’s reaction to these changes will tell us the true level of risk associated with 30 year VS 25 year. If the banks continue to offer 30 year amortization at the same rates as 25 years without offloading the risk to CMHC, then we know the additional risk is indeed insignificant.
    This seems to be my answer. A 30 year amortization is indeed seen as insignificant additional risk for conventional mortgages. In contrast, 35 years and higher are regarded as higher risk and most lenders have chosen to stay away from those products.
    Isn’t it great when the government withdraws their meddling hand and we get real answers from the free market?

  4. Say my mortgage is running out and I want to go with a new lender,
    Do I have to come up with %20 downpaymen cash or can equity be used.
    Been awhile since I needed a mortgage

  5. When the banks don’t have the pure profit center of insured mortgages (insurance paid by the customer, no less) to draw upon to offset losses in the conventional market, then you will know.
    20:1 leverage reduced to 5:1 leverage is hardly insignificant.

  6. You can switch lenders if you have less than 20% equity. You will not have a problem as long as you keep your existing amortization and you don’t increase the mortgage size or loan-to-value.

  7. hi Jack, if you have 20%
    equity , an appraisal
    may be required to prove
    that , then you wouldn t
    need to pay down the
    mortgage, get a mortgage
    broker to walk you thru
    options

  8. I expect the downpayment requriement of these to increase significantly in the near future. If or when prices start trending down in some markets a person’s 20% down could end up in a renewal position where they have <20%, then that person will be in a very ugly situation.

  9. I disagree! If you started out with 20% down, and find out on renewal that your property value has dropped from when you took out the mortgage, the ‘ugly situation’ is just that you can’t switch lenders.
    You still have a mortgage, and you will not be forced to sell. This seems like a minor consiquence for making a dodgy RealEstate investment. And maybe evidence that you should have purchased with a smaller downpayment in the first place. Most insured switches don’t require. New appraisal, as long as loan amount and am stay the same.

  10. Who does 40 yr am in Ontario?? I think MonCana does, but Rob put it at 35 yrs, so I assume they changed. Anybody else doing 40yr am still?

  11. Where have you been lately, Island Broker, some lender’s require clients to qualify at renewal or face the consequences, I have taken those applications from concerned mortgage holders. “Maybe evidence that you should have purchased with a smaller down payment in the first place”!! And being a dodgy investor”, what does that mean??? Man, I would not want to be asking you for advice!

  12. Does anyone remember only a few weeks back when Merix’s niche was a 40 year amortization. Interesting that now they won’t even consider 35 years on conventional business. Anyone know their niche now?

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