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Real Estate · BRIEFDASH EXPLAINER

Mortgage term vs amortization: what Canadian borrowers should know

Understand the difference between your mortgage contract period and repayment schedule, and what to compare at renewal.

Published Sources reviewed Content updated Next review due
THE SHORT ANSWER

Your term is the life of your current mortgage contract. Amortization estimates how long repayment takes. These are different clocks.

Why it matters

A manageable payment today does not tell you the full borrowing cost or what happens at renewal.

Two clocks, one mortgage

A three-year term can sit inside a 25-year amortization. The first describes the contract you agreed to; the second describes the repayment timeline. This is an illustration, not a product recommendation.

[1]

A longer repayment schedule has a trade-off

Other things equal, spreading repayment over more years reduces regular payments but increases total interest. The estimate can change when rates, payment amounts or other contract conditions change.

[1]

Fixed and variable refer to interest

A fixed rate stays unchanged during its term. A variable rate can move. With some fixed-payment variable mortgages, rising rates direct more of the payment toward interest, slowing principal repayment. Ask how your particular product responds.

[2]

Renewal is a new decision point

Unless you repay the remaining balance, you generally need another term. Compare the proposed rate, payment frequency, remaining amortization and applicable charges. Switching lenders can involve costs and approval requirements; an advertised rate is not the whole comparison.

[3]

Questions to take to your lender

Ask for the remaining balance, renewal date, total interest estimate, prepayment privileges and any charge for leaving early. Request a written comparison using the same assumptions for each offer.

[3] [1]

Sources & review

These pages were read for the last complete review. Sources are in English; the French guide translates BriefDash’s original explanation.

  1. FCAC — Mortgage terms and amortization ↗Checked November 6, 2026
  2. FCAC — Interest on mortgages ↗Checked November 6, 2026
  3. FCAC — Renewing your mortgage ↗Checked November 6, 2026

Original educational explanation based on FCAC guidance. No government endorsement. Your lender’s current contract and eligibility rules govern.

Review & update history

  1. Sources rechecked

    Official sources and use terms rechecked; English/French explanation unchanged.

  2. Sources rechecked

    Official sources and use terms rechecked; English/French explanation unchanged.

  3. Published

    Initial official-source review completed; original English/French guide published.

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