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GLOSSARY

Canadian Financial, Real Estate and Mortgage Glossary

How often this word is used
 
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50% - Moderately

Amortization Period


Synonyms:remuneration period, repayment plan
Filed Under: financial-banking, mortgages
Tags: banking, lending, loan, mortgage
 

Definition of amortization period

amortization period
1. The amount of time it takes to pay off a mortgage. The maximum amortization period in Canada is 30 years. Amortization period should not to be confused with a mortgage term. Over the course of an amortization period, a homebuyer will likely go through multiple mortgage terms whereas the buyer will most likely only go through the one amortization period.

Related Terms and Acronyms:

  • amortization   Amortization refers to the process of gradually paying down the principal of a loan. Each payment toward the principal reduces your loan by that amount. This is different than an interest-only loan payment where the principal balance is never reduced. Amortization for a mortgage loan in Canada is normally 25 years, but can be as few as 5 years.
  • amortization schedule   A detailed table showing the amortization of a loan which includes the beginning principal amount, period payments, the interest portion of each payment, the principal reduction portion each payment, and the ending balance. The Canadian Equity Group has developed a mortgage rate calculator which will generate a perfect example of an amortization schedule.
  • amortization table   A mathematical formula used to calculate monthly mortgage payments based on the borrowed loan amount, the interest rate, and the loan term.
  • amortization term   The time required to amortize (repay) an entire mortgage loan.
  • lump sum payment   One-time single-sum payment or payout.
  • term   The length of time you commit to repay a lender or bank at an agreed upon interest rate and payment schedule. The interest rate usually remains constant during this term unless the commitment states otherwise. For example, a five year fixed rate mortgage has a term of five years.

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Below is a listing of our most popular mortgage product inquiries made using our online mortgage application for all of Canada.

Mortgage Product Type Inquiries
Mortgage Pre-approval21.57%
First-time Home Buyer17.26%
New Purchase15.31%
Refinance/Consolidate Debt14.19%
No Money Down discontinued11.65%
Mortgage Renewal10.16%
Other9.85%