Amortization Period

The amortization period is the length of time it will take you to completely pay off a mortgage. The most common amortization period in Canada is 25 years.

If your down payment is less than 20%, the maximum amortization period allowed is 25 years. Since most mortgages have a 5-year term, this gives you flexibility at the end of the 5 years to either continue with the amortization period remaining at that time or change it.

Your amortization period affects the size of your mortgage payment. The longer the amortization period, the smaller the monthly payment but, the longer it will take you to pay off your mortgage. While a longer amortization period can make your monthly payments more manageable, it also means that you will pay more interest over the life of your mortgage. 

A shorter amortization period results in a larger mortgage payment but will save you money in the long run because you’ll be paying less interest over the life of your mortgage. It will also allow you to be mortgage-free sooner.