Amortization is the number of years it would take to pay the mortgage off at the current payment. It is not the same as your term, which is the length of the contract with your lender. You choose the amortization once at the start and can revisit it at renewal or refinance.
The trade-offs
- A longer amortization means a lower payment each month but more total interest over the life of the loan.
- A shorter amortization means a higher payment but cuts the overall borrowing cost, so you are mortgage-free sooner.
- Most borrowers in Ontario pick from the commonly available lengths, but lenders do offer flexibility depending on your down payment and property type.
- The government sets a maximum amortization for insured mortgages. Uninsured mortgages can sometimes go longer.
- An amortization schedule shows how each payment shifts from mostly interest in the early years to mostly principal later on.
- Changing your amortization later, at renewal or through a refinance, can help you adapt to new goals or a change in income.
- Mortgage agents in Ontario are required to explain your options clearly and to recommend something that suits your situation.
Where to go from here
Which matters more to you, a smaller payment now or less interest over the years? The affordability calculator shows how the payment moves with the amortization you pick. If your term is ending, renewal is the one moment you can change the amortization with no penalty, and a refinance can do it mid-term when the numbers make sense.
This article is general information, not financial advice, and quotes no rates. Your situation may differ; speak with a licensed mortgage professional.