Kanetix Forum

Can you please explain what the difference is between the amortization period and a mortgage term?

The amortization period is the time it takes to pay off a mortgage in full (assuming all scheduled payments are met, extra payments are not applied to the mortgage and the interest rate stays the same). Until recently, the longest amortization period a person could get was 25 years. This has changed and now people can get a mortgage that is amortized up to 40 years.

The amortization period is broken up into smaller chunks of time called mortgage terms. Terms can be as short as 6 months. The most common however are 1, 3 or 5 years in duration, but you can also find terms that go up to 7 or 10-year terms.

Paul Sidhu, Principal Mortgage Broker at KTX Financial.

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