Tuesday, October 7, 2025

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Chrystia Freeland Introduces 30-Year Mortgages, But What Could Be The Real Cost?

Finance Minister Chrystia Freeland has announced that starting August 1st, lenders will begin offering 30-year mortgages in a significant shift for the Canadian housing market. This move aims to make homeownership more accessible, particularly for younger Canadians who are struggling to enter the market.

“This means that first-time home buyers will now have 30 years to pay off their mortgage instead of 25 years. That translates to lower monthly payments, so more younger Canadians can afford to pay that monthly mortgage on a new home,” Freeland stated.

Freeland emphasized that this initiative is part of a broader strategy to support younger Canadians. “This is just one of several measures that our government is taking to help younger Canadians save for that first down payment and afford a home of their own. Our fiscally responsible plan has helped put the Bank of Canada in a position to lower interest rates for the second time in a row last week. Lower interest rates mean that mortgage payments will be more affordable, helping more Canadians get into the housing market to buy that first home of their own.”

However, the announcement has been met with mixed reactions. Critics argue that while the extension to 30-year mortgages lowers monthly payments, it significantly increases the overall interest paid over the life of the loan. Social media commentator @Tablesalt13 voiced concerns on Twitter, stating, “How in the F$*K does a minister of finance not mention that the effective interest rate is around 100%??? Isn’t her job to protect consumers??”

According to calculations at a 5% interest rate, a borrower will pay approximately $93,255 in interest for every $100,000 borrowed over 30 years. This represents a 25% increase in interest payments compared to a 25-year mortgage, even though monthly payments decrease by 8%.

Financial analysts have pointed out the long-term implications of this change. While the immediate benefit is clear – lower monthly payments – the total cost of borrowing could increase substantially. This could lead to more debt accumulation and potential financial strain in the long run, according to some experts.

Supporters argue that the flexibility of a longer mortgage term provides much-needed relief for first-time buyers in a competitive and expensive housing market. The lower monthly payments associated with a 30-year mortgage can make the difference between renting indefinitely and owning a home, offering a viable path to homeownership for many Canadians who might otherwise be priced out of the market.

The new rules are set to apply to first time homebuyers that are purchasing new builds.


Information for this briefing was found via the sources mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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