By Madeleine Maltese
If you have just bought a house or a condo, you have certainly taken out a mortgage loan… and your vocabulary has been instantly enriched with a host of terms that are not always simple!
During the tremendous annual round of removals in Quebec, some have again settled as tenants, others have finally realized their dream of becoming owners. If you have just bought a house or a condo, you have certainly taken out a mortgage loan… and your vocabulary has instantly been enriched with a host of terms! Among others: amortization period.
The amortization period is the number of years it will take to pay off your mortgage fully.
Usually, the standard amortization period offered by banks is 25 years, but the choice is yours.
Note: if the amortization period is extended, your mortgage payments will be lower (because they are spread over a more extended period), but you will pay a lot of interest. Conversely, if it’s short, your payments will be higher, but you’ll save on welfare — and you’ll be mortgage-free sooner.
In other words: The amortization period has a direct impact on the total interest you will have to pay on your mortgage loan and, therefore, on the total amount you will have to pay for your property. Choose your amortization period taking into account your objectives and your budget.
And since you are now responsible for paying your mortgage, it is good to know that mortgage insurance can protect your mortgage and your family’s finances in the event of death or severe illness.
