Amortization

Amortization is the time horizon over which your mortgage principal is paid down to zero. In Canada, the most common amortization is 25 years for an insured (high-ratio) mortgage and up to 30 years for a conventional mortgage with at least 20% down. As of August 2024, first-time buyers and buyers of new builds may also qualify for a 30-year amortization on insured purchases. Amortization is different from your mortgage term. The term is the length of your current contract with the lender (typically 1 to 5 years); when the term ends, you renew at the prevailing rate. A longer amortization means lower monthly payments but more total interest paid over the life of the loan.