What the rules allow
Insured mortgages are capped and cannot exceed the original amortization schedule — in practice 25 years, or 30 where the borrower qualified under the 2024 reforms as a first-time buyer or a purchaser of a newly built home. Uninsured mortgages at conventional lenders commonly go to 30 years, and alternative lenders will go to 35 for qualifying borrowers.
What it buys and what it costs
The book's worked household, $420,605 at 4.24%: 20 years is $2,594 a month and $201,956 of interest over the life. 25 years is $2,268 and $259,654. 30 years is $2,058 and $320,121. Stretching from 20 to 30 cuts the payment by $536 a month — more than the entire renewal shock of $428, and it takes the payment below what they were paying at 2.20%. It costs $118,165 in extra interest.
This book's position is that extension is a real tool with a large and knowable price, and you get to decide. Which is why the price is printed in full rather than summarised.
The other direction, which is free
Most Canadian mortgages allow penalty-free lump sums of 10% to 20% of the original principal a year, plus a privilege to increase your regular payment by a set percentage. These are rights you already have, written into the contract you signed, and they cost nothing to use.
They are also non-cumulative. Use it or lose it. A borrower with a 15% privilege on a $500,000 mortgage has $75,000 of penalty-free prepayment room every single year, and if none of it is used it is gone at the reset date and a fresh $75,000 appears. Over a five-year term that is $375,000 of unused right. Most households never make a single lump sum prepayment in the life of a mortgage.
What even a small one does: $10,000 against $420,605 at 4.24% on day one, leaving the payment where it is, clears the mortgage eight months sooner and buys back $12,829 of interest.
