Your term is the length of your current mortgage contract — often five years — after which you renew, while your amortization is the total time to pay the mortgage off in full, usually 25 years. Test different combinations in our mortgage calculators and check today's prime rate.
Term is how long your current contract and rate are locked (e.g. 5 years); amortization is the total years to fully repay (e.g. 25). You renew several terms over one amortization because rates are only fixed for the term. When a term ends you still owe a balance and renew at the current rate. This is not financial advice.
The term is the length of your current contract with the lender — most commonly one to five years in Canada, with the five-year term the most popular. It fixes your rate type, rate and conditions for that window. When the term ends you do not owe the whole balance; you owe whatever is left, and you renew for another term at whatever rate is current. The term is also what matters if you want to leave early — breaking it can trigger a penalty. Read more in should I break my mortgage.
Amortization is the full length of time it takes to pay the mortgage down to zero, assuming your scheduled payments and a steady rate. In Canada the standard is 25 years; uninsured borrowers with 20% or more down can often stretch to 30 years, while insured mortgages are capped at 25. A longer amortization lowers each payment but raises total interest, because you carry the balance longer. See how it works in mortgage amortization explained.
Illustrative example. Suppose you buy with a 25-year amortization and choose a five-year term. Over the first five years you make payments at your locked rate; at the end you have paid down part of the balance but roughly 20 years of amortization remain. You then renew for a new term — another five years, say — at the rate available that day, and repeat. In total you would go through about five terms across one 25-year amortization. Only the payments and rate are set by the term; the finish line is set by the amortization. These figures are illustrative only.
| Feature | Term | Amortization |
|---|---|---|
| What it measures | Current contract length | Total time to pay off |
| Typical length | 1–5 years | 25 years (up to 30) |
| Rate locked? | Yes, for the term | No — resets each renewal |
| What happens at the end | You renew | Mortgage is paid off |
Each term carries its own rate, so choosing a term length is partly a view on where rates are heading. A shorter term lets you reprice sooner if you expect the Bank of Canada to cut from today's 2.25% overnight rate; a longer term locks certainty for more years if you think rates could rise. With the next decision on July 15, 2026 and prime near 4.45%, review the rate history and consider prime vs fixed before you pick. Your amortization, meanwhile, mainly drives the size of each payment.
The term is the length of your current mortgage contract — commonly one to five years in Canada — after which you renew. The amortization is the total time to pay the mortgage off in full, often 25 years. You will go through several terms over a single amortization.
Because Canadian mortgage rates are only locked for the term, not the whole amortization. When a term ends you still owe a balance, so you renew — at whatever rate is current — and keep repaying until the amortization is complete.
A five-year term is the most common choice, and a 25-year amortization is standard, though uninsured borrowers with 20% or more down can stretch to 30 years. Insured mortgages are capped at 25 years.
Yes. Each term has its own rate. A shorter term lets you reprice sooner if you expect rates to fall; a longer term locks certainty for more years. With the overnight rate at 2.25% and prime near 4.45% in 2026, term choice is really a bet on where rates head next.
Often yes. At renewal you can usually reset the amortization on the remaining balance — extending it to lower payments or shortening it to pay off faster — within your lender's and insurer's limits.