Mortgage holders are sometimes confused between the words "term" and "amortization" in their mortgages. The amortization of your mortgage refers to the total number of years it would take you to pay off your housing loan. The average Canadian mortgage is amortized over 25 years, although if you can afford higher monthly payments, you can shorten your amortization period and pay off your mortgage earlier. You may also choose an amortization period longer than 25 years - just be aware that you will accumulate higher interest costs over the long run.

        Because your financial circumstances can change substantially over the years, it's important to recognize that you may change your amortization period - to longer or shorter - throughout the life of your mortgage.

        The term of your mortgage is the period for which your current payment arrangement is valid.

        As an example, if you chose a 25-year amortization period for your home, the total mortgage amount you owed, plus interest, would be fully paid off after 25 years. During that 25-year period, if you chose to renew the terms of your mortgage every five years, your interest rate and your payments, and any pre-payment options, would be set for each five-year period. At the end of the first five-year term, your amortization would be 20 years, and you could re-negotiate both the term and the amortization at that point, depending on your current financial situation.

        Need clarification on the details of your mortgage? Please, never hesitate to call with your questions!