Located on the Northwest shores of Lake Ontario, Toronto is the most densely populated city in Canada, a city with much to offer locals and visitors alike. Enjoy live theater, a vibrant nightlife, explore eclectic shops, restaurants, how about a rollercoaster ride at the Canadian National Exhibition there is something for everyone in this city. But you know how great the Toronto area is. That’s why you moved here.
You are here because you want to know what does amortization period mean.
What does amortization period mean
In the simplest terms an amortization period is the length of time or numbers of years it takes to pay your mortgage in full. At one time in Canada you could amortize your mortgage over a 40 year period maximum. Today it has been limited to 25 years for high ratio mortgages and 30 years for conventional mortgages. If you know where to look there are still one or two lenders quietly offering 35 year amortization periods.
Why is it important
The amortization means the length of time it takes to pay off your mortgage including the interest your lender charges. Choosing a different option can greatly affect the size of your payments and interest you pay the vendor over the life of your mortgage. Although longer amortization periods mean smaller payments it is advantageous to go with the largest payments you can afford. You will pay off the mortgage faster and will save thousands of dollars in interest over time. Just one example on a $350,000 mortgage with a constant interest rate of 2.99% paying over 30 years instead of 35 years could save you thousands. Your payment would rise by $184.24 from $1286.01 to $1470.25 you will be mortgage free five years earlier and save $34,110 in interest.
If you reside in Toronto or surrounding communities and find yourself looking for mortgage expertise or have questions about your existing mortgage why not call Rakhi Madan Mortgage Agent.
