Should You Choose A Thirty-Year Mortgage Amortization Period?

Author: Boychuk Mortgage Group | | Categories: Mortgage Broker , Mortgage Renewals , Reverse Mortgage

Blog by Boychuk Mortgage Group

Are you looking to purchase a home and are unsure of whether a Thirty-year mortgage amortization period is suitable for your needs? One thing is for sure, and it’s an important decision that should not get taken lightly.

The amortization period is the length of time it will take to pay off your entire loan balance, with each payment comprising both principal and interest. In Canada, most mortgages have a maximum amortization of twenty-five years, but if you make a down payment of 20% or more, you may qualify for a thirty-year mortgage. Let’s break down the advantages and disadvantages of this type of loan so you can make an informed decision.

Advantages of A Thirty-Year Mortgage Amortization Period

Smaller monthly payments are the main advantage of taking out a thirty-year mortgage in Canada. It means more money can get allocated towards other expenses such as debt repayment or investments. In addition to smaller payments, taking a 30-year amortization will help you qualify for more on your current purchase, as well as any future purchases. Finally, opting for a longer amortization offers more flexibility when making extra payments or refinancing the mortgage later, as there will be more time left on the loan balance at any given moment.

Disadvantages Of A Thirty Year Mortgage Amortization Period

If you choose to go with a thirty-year mortgage amortization period, some drawbacks should be considered. This type of loan, while advantageous with the lower payment and greater flexibility in the short run, will result in slightly higher interest costs over the full length of your mortgage due to its extended term length. On top of that, interest rates tend to edge a tad higher on this kind of loan than on shorter amortization terms. Lastly, equity growth will be slower with this type of loan since it takes longer to pay off the principal balance than a shorter amortization (i.e., fifteen years).

Expert Tip

Choosing the ideal amortization period can seem daunting at first; however, by understanding all the benefits and drawbacks associated with each one, you’ll be able to pick the option that best fits your needs and budget.

Before making a final decision, we suggest using an online amortization calculator so that you can compare both options side by side and determine how much money you’ll have to pay over the lifetime of your mortgage agreement! Good luck!

Get in touch with us today!

If you need assistance choosing a mortgage amortization period, contact Boychuk Mortgage Group - Mortgage Broker. As an experienced Mortgage Broker in Burnaby, British Columbia, we can help you with all your mortgage needs. We offer free, no-obligation advice and strive to create a stress-free lending experience which includes offering a lowest rate policy guarantee. Please click here to view our services. Alternatively, to schedule a meeting, call (778) 808-9944 or email