Canadian mortgage guide
Canadian mortgage term vs amortization period
Canadian mortgage documents commonly show both a term and an amortization period. They describe different parts of the loan.
In short
The amortization period is the planned time to repay the mortgage in full. The term is the length of the current rate and contract before you renew, refinance or pay out the mortgage.
Amortization period
Your payment is calculated so the balance would be repaid over the chosen amortization period if the rate stayed the same. A longer period can lower the payment but can increase total interest.
Mortgage term
The term can be much shorter than the amortization period. At the end of the term, the remaining balance normally needs to be renewed, refinanced or paid off, potentially at a different rate.
Other costs to budget for
A simple payment estimate does not include mortgage-default insurance, property taxes, home insurance, closing costs, maintenance or changes at renewal. Rules and lender offers vary.
Use the Canada mortgage calculator for a monthly planning estimate. It applies the usual Canadian semi-annual compounding convention but is not a mortgage offer or financial advice.