Choosing an Amortization Period

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The amortization period on a mortgage is the total length of time it will take to pay off the mortgage.

Longer Amortization Periods

A longer amortization period can lower mortgage payments. However, the longer the amortization, the more interest paid to the lender – which could affect the homeowners saving ability for retirement.

How to Reduce Your Total Interest Costs Regardless of the Amortization

Increase the frequency of payments. Making accelerated biweekly payments rather than monthly payments will save you interest.
Know and use the prepayment privileges on the mortgage. On most mortgages you can prepay a certain amount each year, without penalty. Making prepayments as often as possible helps to lower the principal balance outstanding and saves interest.
At renewal time, shop around. Make sure you still have the right mortgage for your needs. Be sure to consider the interest rate, term, prepayment, privileges and other options.

*Source Financial Consumer Agency of Canada

Choosing an Amortization Period

Longer Amortization Periods

How to Reduce Your Total Interest Costs Regardless of the Amortization

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