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Amortization Period

Choosing an amortization that's right for you.

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 is paid to the lender - and this can negatively affect your ability to save 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