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Your mortgage amortization period is the number of years it will take you to pay off your mortgage. Depending on your choice of amortization period, it will affect how quickly you become mortgage-free; as well as how much interest you pay over the lifetime of your mortgage. A longer amortization could mean smaller payments, but in the long run, it means more interest. Whereas a shorter amortizations results in paying less interest, but larger payments in comparison.

Amortization Benchmarks

A 25-year period is the standard length of amortization used by the majority of lenders. While this is the standard, it is not the only option when it comes to your mortgage. Mortgage amortizations can be as short as 5 years and as long 50, depending on the lender.

Benefits of a Shorter Amortization (<25)

Opting for a shorter amortization period will result in paying less interest overall during the life of your mortgage. Choosing this amortization schedule means you will also become mortgage-free faster and have access to your home equity sooner! However, if you choose to pay off your mortgage over a shorter time frame, you will have higher payments per month. If your income is irregular, you are at the maximum end of your monthly budget or this is your first home, you may not benefit from a shorter amortization and having more cash flow tied up in your monthly mortgage payments.

Benefits of a Longer Amortization (>25)

When it comes to choosing a longer amortization period, there are still advantages. The first is that you have smaller monthly mortgage payments, which can make home ownership less daunting for first-time buyers as well as free up additional monthly cash flow for other bills or endeavors. A longer amortization also has its advantages when it comes to buying a home as choosing a longer amortization period can often get you into your dream home sooner, due to utilizing standard mortgage payments versus accelerated. In some cases, with your payments happening over a larger period, you may also qualify for a slightly higher value mortgage than a shorter amortization depending on your situation.

Keep in Mind

It is important to mention that you are not stuck with the amortization schedule you choose at the time you get your mortgage. You can shorten or lengthen your amortization; as well as consider making extra payments on your mortgage at a later date.

Mortgage Renewal is a great time to review your amortization and payment schedules, and make changes if they are no longer working for you.

If you have any questions about this or any other mortgage related inquires, please don’t hesitate to reach out!


  • Published by my DLC Marketing Team