What Is Amortization?
What is amortization?
Amortization is the total number of years it takes to fully pay off your mortgage.
In Canada, the most common amortization is 25 years, but some buyers choose 30 years to reduce their monthly payments.
Why amortization matters
Amortization affects two major things:
- Your monthly mortgage payment
- The total interest you pay over time
You can test different amortization options using the Mortgage Payment Calculator.
Short vs long amortization
- Short amortization (20–25 years): Higher payments, less interest
- Long amortization (30 years): Lower payments, more interest
A $600,000 mortgage at 5% over 25 years vs 30 years:
• 30-year amortization → lower monthly payment
• But you may pay tens of thousands more in interest over time
Why most buyers choose longer amortization
Many buyers focus on affordability. A longer amortization lowers monthly payments, making it easier to qualify for a mortgage.
But this comes with a trade-off — more interest paid over time.
Amortization vs mortgage term
These are often confused:
- Amortization: total payoff timeline
- Term: length of your current mortgage contract (often 5 years)
How to choose the right amortization
The best option depends on your goals:
- Lower payments → longer amortization
- Save on interest → shorter amortization
You can compare both options side-by-side using the Dual Scenario Mortgage Calculator.
Amortization vs total home cost
Your mortgage is just one part of owning a home. You also need to consider taxes, maintenance, and utilities.
Use the Homeownership Cost Calculator to see the full picture.
Simple summary
Amortization is how long it takes to pay off your mortgage. A longer amortization lowers your monthly payment but increases the total interest you pay.
Last updated: April 2026