Pros & Cons of Extending Your Amortization

Author: Boychuk Mortgage Group |


Because interest rates have risen rapidly over the past year, if you are up for renewal you may have heard of people choosing to extend their mortgage amortization period to 30 years.

Here’s a few things to know:

  • Extending your amortization can be a great way of lowering your monthly mortgage payment if you are coming out of a lower mortgage rate into today’s rates. If that’s your main priority, this can be a great option.
  • You will have to refinance your mortgage rather than simply renewing which may be accompanied by costs of a home appraisal, legal fees, discharge fees, etc.
  • Refinancing your mortgage into a longer amortization means your broker can shop better rates for you than what your current lender offers you at renewal. A slightly lower rate can make a significant difference to your monthly payment.
  • You can always consolidate debt when refinancing your mortgage to extend your amortization, which may help reduce interest being charged on other purchases while lowering your overall monthly expenses.
  • Extending your amortization means you’re paying more to interest for the additional years of having a mortgage. Although you might not notice this cost upfront, this can add up and make a substantial difference.
  • It is important to consider your personal longer-term goals. If your objective is to retire without a mortgage, you may want to strategize a plan with your broker on how to pay your mortgage off sooner once rates lower again.

Reach out if you’re up for renewal soon & want to calculate what your best options are in the current market 🙂