25-year mortgage terms are available in Canada, though it is an extremely specialized mortgage product. A 25-year fixed-rate mortgage will lock in a rate for a quarter of a century, ensuring that your payments are steady for that entire period. While this might sound like a great idea, 25-year terms come with very high rates, often several times higher than the rates on a 5-year fixed-rate mortgage.
When would you use a 25-year mortgage term?
25-year mortgage terms are generally only used by a specific type of investor that needs long-term certainly for their repayments, regardless of the mortgage rate. 25-year terms are virtually never used for retail mortgages, as they are far more expensive than more traditional mortgage terms of less than 10 years. If you're looking for a mortgage with a long-term fixed-rate, a 10-year fixed mortgage rate offers many of the same benefits of a 25-year term, but at a much lower price.
Because they are such a niche product, 25-year fixed-rate mortgages are not offered by the large majority of lenders. At the time of writing, only RBC (Royal Bank of Canada) offers a 25-year fixed-rate mortgage. Check the comparison rates at the top of this page to see the current rates.
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Guide to 25-year fixed-rate mortgages
Jamie David, Sr. Director of Marketing and Mortgages
There is a wide range of mortgage products available in Canada, and 25-year fixed-rate mortgages are excellent proof that the industry is ready to meet any need, no matter how niche. For most of us, 25-year mortgages are not going to be the best product for our needs, but for the right person, it might be just the ticket.
What is a 25-year fixed-rate mortgage?
A 25-year fixed-rate mortgage is what it says on the box: A mortgage with a fixed-rate for a period of 25 years. Fixed mortgage rates have the advantage of locking in a set monthly payment for your entire mortgage term (unlike variable rates, which can change month to month). A 25-year term is the longest available in Canada, but comes with much higher rates than a more traditional term length, like a 5-year mortgage. As a result, it is not an especially popular term - just 0.5% of all mortgage requests made on Ratehub.ca from January to September 2023 were for 25-year fixed-rate mortgages. Even if we look at the whole of 2022, that same figure is only 0.7%.
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25-year terms vs. amortization
It's important not to be confused between 25-year terms and 25-year amortization periods. A 25-year term locks in a single rate for the entire 25-year term. A 25-year amortization, on the other hand, refers to the total life of your mortgage, which is more commonly comprised of several mortgage terms (for example, five 5-year terms back-to-back).
Alternatives to a 25-year fixed mortgage rate
If you're looking to lock in a low rate for a long period of time, or are trying to ensure steady mortgage payments for as long as possible, a 25-year fixed mortgage rate might seem attractive. However, the very high mortgage rate you'll be offered will very likely make it unviable.
A strong alternative to a 25-year fixed mortgage rate is a 10-year fixed mortgage rate. A 10-year term with a fixed rate offers many of the benefits of a 25-year term, but with a much lower mortgage rate.
Jamie David, Director of Marketing and Head of Mortgages
Jamie has 15+ years of business and marketing experience. She contributes her mortgage expertise to The Globe and Mail and authors Ratehub’s mortgage and homebuying guides. read full bio
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Perenna is a new lender targeting the long-term market, offering rates that are fixed for as long as 40 years but that only tie the borrower in for the first five. They currently offer a 25-year mortgage at 5.75%.
Perenna is a new lender targeting the long-term market, offering rates that are fixed for as long as 40 years but that only tie the borrower in for the first five. They currently offer a 25-year mortgage at 5.75%.
With a fixed–rate mortgage, you'll always know what your monthly principal and interest payments will be. You can choose a 10–, 15–, 20–, 25– or 30–year term for fixed-rate mortgages.
The main advantage of choosing to pay a mortgage over a longer period of time is you are spreading that cost so the monthly repayments will be lower. This means more immediate disposable income and less pressure to keep up with additional payments of other bills.
Yes, You Can Get a 30-Year Mortgage in Canada. But Should You? A 30-year mortgage offers lower monthly payments and more flexibility than shorter mortgages. But it might also cost more over the lifetime of the loan.
Canada's mortgage system typically favors terms of 1-5 years due to the flexibility and security they offer in terms of payments and interest rates. While longer terms up to 25 years are possible, they are not common due to the potential disadvantages, such as higher interest rates over the long term.
While 5 year fixes once seemed long term, you can now fix for 10, 15, and even up to 40 years. A long term fixed rate mortgage means that the interest rate you agree to today will still be yours long into the future, but this greater security means you'll be paying a bit more in interest now.
Lenders may offer fixed terms between 1 and 10 years; however, most fixed rate terms are between one and five years. Once a borrower has locked in their fixed rate, they will start paying the fixed interest rate straight away.
There are a lot of mortgage deals on the market today that allow you to make regular monthly payments for a fixed number of years over a lengthy time period. You can apply for a 20-year mortgage if you decide that is the most suitable option for you and your financial situation.
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