Introduction
In real estate investing, time can be your best friend, especially when it comes to your mortgage. Imagine you’re running a 12-unit apartment building in Calgary. Every month, you’ve got rent coming in, bills going out, and the constant juggle between profit and reinvestment. Now imagine cutting your mortgage payment by nearly a third… without touching your rental income. That’s the power of ultra-long amortization.
What is a 50-Year Amortization?
In Canada, most investors are used to 25-year amortizations. But programs like CMHC’s MLI Select allow you to stretch that to 40, 45, or even 50 years for eligible multi-family properties. The idea is simple: spread the same mortgage balance over more years, and your monthly payment drops significantly.
Calgary Example – 12-Unit Apartment
Let’s say you just bought a $3 million apartment in Calgary’s Beltline.
Purchase Price: $3,000,000
Down Payment (25%): $750,000
Mortgage Amount: $2,250,000
Interest Rate: 4.5% fixed
Monthly Payments
25-Year Amortization: ≈ $12,456/month
50-Year Amortization: ≈ $9,458/month
That’s nearly $3,000 extra in monthly cash flow or $36,000 per year without raising a single rent.
When Does This Make Sense?
Property Stabilization: New acquisitions where you’re improving occupancy or raising rents.
Cash Flow Priorities: You want breathing room to reinvest in upgrades or pad your reserves.
Debt Service Coverage Ratio (DSCR) Requirements: Lower payments can help meet lender requirements for larger deals.
Trade-Offs to Consider
More Interest Paid: You’ll pay significantly more over the life of the loan.
Longer Debt Horizon: Your property stays leveraged for decades.
Exit Strategy: If you plan to sell in 5–10 years, this might not matter, but if you want to own outright, it’ll take longer.
Final Thought
50-year amortizations are a tool, not a shortcut. Used strategically, they can help Calgary multi-family investors improve cash flow, pass lender stress tests, and create space for growth. But they require discipline: the temptation to spend that extra cash should always be balanced by a long-term plan.
