Amortization period

Amortization period is the length of time it takes to pay off a mortgage, including interest. The maximum amortization period may be 25 or 30 years, depending on the mortgage details. For anyone buying a newly-constructed home, or for first-time homebuyers of a new or existing home, the maximum amortization for an insured mortgage is 30 years. In other cases, the maximum amortization is 25 years. Where the down payment is less than 20% of the property value, the mortgage is considered high-ratio and mortgage default insurance is required.

Amortization period differs from mortgage term, which is the length of the contract with your lender. When a term ends, you either pay off your mortgage or renew it, if your lender agrees. Terms range from 6 months to 10 years.