Your mortgage term determines how long your interest rate is locked in. Choosing the right term is one of the most impactful decisions you'll make—yet many borrowers default to 5 years without considering alternatives.
Understanding Mortgage Terms
What's a Mortgage Term?
The term is the length of your current mortgage contract. At the end of the term, you must renew (or pay off the mortgage).
Important distinction:
- Term: Length of rate contract (e.g., 5 years)
- Amortization: Total payoff time (e.g., 25 years)
Available Terms in Canada
Interpretation: Shorter terms usually win—but not always. The times they lose can be significant.
FAQ
Q: What's the most popular mortgage term?
A: 5-year fixed is chosen by about 70% of Canadians. But popularity doesn't mean it's optimal.
Q: Can I switch from variable to fixed mid-term?
A: Usually yes—your lender can convert to their fixed rates, or you can refinance.
Q: What term do mortgage brokers recommend?
A: Depends on your situation. Good brokers discuss your timeline, risk tolerance, and rate outlook.
Q: Are rates always lower for shorter terms?
A: Usually, but not always. Sometimes the yield curve inverts and longer terms are cheaper.
Q: What if I choose 1-year and rates go up?
A: You'd renew at higher rates. This is the trade-off for the initial savings.
What's Next
Not sure which term fits your situation? Connect with our team and we'll analyze your timeline, risk tolerance, and goals to recommend the optimal term.
Find Your Optimal Term
Get rate quotes for different terms and find what works best for your situation.
