What is a mortgage term?

Buying a home? It’s important to understand how different mortgage term lengths can affect the cost of owning a home.

Mortgage terms can be anywhere from a few months to many years. In Canada, the most common term is five years. Shorter terms typically have lower rates, but you’ll have to renew or refinance sooner. While longer terms tend to have higher rates, you wouldn’t have to worry about renegotiating for a longer period of time.

Example: “Eugene’s mortgage had a five-year term and a 25-year amortization, so he expected to renew it four times before the mortgage was paid off completely.”

Read more about mortgages:

The best 5-year fixed mortgage rates in Canada
You have so many options for finding the best mortgage rate for you. Here’s how you can compare some of the best fixed rates available.
Every mortgage calculator you will ever need
How much will your mortgage cost you every month? Can you save money by switching lenders? Mortgage calculators can answer these questions and more.
Mortgage affordability calculator
A mortgage affordability calculator uses your income, debts and living expenses to determine how much money you can borrow to buy a home.
Should you accelerate your mortgage payments—or invest?
Chantal wants to pay down debt, invest and buy a property down south but isn’t sure which to prioritize
What is a fixed-rate mortgage?
A fixed-rate mortgage offers home owners predictable payments. How does it compare to a variable rate? Learn how fixed-rate mortgages work in the MoneySense Glossary.

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