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Amortization Period
Total Mortgage Maturation
Amortization period describes the total number of years it will take you to pay off the entirety of your mortgage. Simple, right? And yet, the way your amortization period is set up will have an impact on how much your monthly payments are, how much interest you pay, and how long you’ll be paying it off. If you want to chat about what amortization period works best for you and your personal finances, contact me to talk through your options. If you want to learn more about how amortization periods work and what length is best for you, read on.
How Long Should My Amortization Period Be?
Option 1: A Short (Sub 25-Year) Amortization
Opting for a short amortization period, which generally ranges from 5-20 years, means you’re in a position, financially, to be aggressive with your monthly payments. If you’ve purchased a property well under your budget, this is the best way to pay off your loan sooner — and save on interest payments along the way. While it will result in a higher monthly mortgage cost, you’ll save potentially tens to hundreds of thousands of dollars in the long run.
Option 2: A Standard (25-Year) Amortization
The most popular length for an amortization period is 25 years. This tried-and-true schedule offers the best balance between paying off your mortgage within a reasonable amount of time, while also helping to keep monthly costs reasonable. For the majority of Canadians, this is the best option and will be simple to apply for.
Option 3: A Long (30-Year) Amortization
If monthly affordability is your priority, then you may want to choose a 30-year amortization period. This is the maximum length you’ll find in Canada, and even a difference of 5 years can significantly lower your monthly payments compared to a 25-year period. If your home is in good shape and your life circumstances are unlikely to change significantly in that period, a 30-year mortgage can help you budget appropriately — although you’ll also be paying more interest over the duration of your mortgage.
Why Choose A Mortgage Agent Vs A Big Bank?
Big banks are great for personal finances, but mortgage agents do one thing and one thing only: work hard to get you the best mortgage rate. Canadian mortgage brokers have access to a wide selection of mortgage lenders, which means that, in many cases, mortgage broker rates are lower than bank mortgage rates. It doesn’t stop at low rates, though. There are many more reasons why a mortgage agent is the best choice for your mortgage — find out what else sets us apart.
Contact Me
The Best Mortgage Rates Are Here
Do you have questions about your mortgage eligibility? Or, maybe you’re ready to apply for a mortgage or get a mortgage quote? Contact me anytime via call, text, or contact form. Find out why so many people trust mortgage agents to handle their home loans.