Understanding Mortgage Amortization
Amortization is the total time to pay off your mortgage with regular payments.
Amortization Options in Canada
Standard Options:
- 25 years (most common)
- 20 years
- 15 years
Extended (Uninsured Only):
- 30 years
- 35 years (limited availability)
Impact on Monthly Payments
$500,000 Mortgage at 5%:
| Amortization | Monthly Payment | Difference |
|---|---|---|
| 15 years | $3,954 | Baseline |
| 20 years | $3,278 | -$676 |
| 25 years | $2,908 | -$1,046 |
| 30 years | $2,684 | -$1,270 |
Impact on Total Interest
| Amortization | Total Interest | Extra Cost |
|---|---|---|
| 15 years | $211,720 | Baseline |
| 20 years | $286,720 | +$75,000 |
| 25 years | $372,400 | +$160,680 |
| 30 years | $466,240 | +$254,520 |
Choosing Your Amortization
Choose Shorter (15-20 years) If:
- You can afford higher payments
- You're older and want mortgage-free before retirement
- You prioritize interest savings
Choose Standard (25 years) If:
- You want balanced payment/savings
- You're younger with income growth ahead
- It's your first home purchase
Choose Longer (30 years) If:
- You need lowest possible payment
- You have variable/uncertain income
- You're in expensive market
Frequently Asked Questions
Can I change my amortization mid-term?
Generally only at renewal. But prepayments effectively shorten your amortization anytime.
Does longer amortization affect approval?
It makes it easier to qualify since payments are lower.
Use our calculator to compare amortization scenarios.
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