The number of years and months over which you will repay this loan. The most common amortization period is 25 years. Not to be confused with the term of your loan, which is the duration of the loan agreement you signed with your financial institution and that has to be renewed regularly. Terms are generally for 1 to 10 years.
By choosing an accelerated payment frequency, you can reduce your amortization period and save thousands of dollars in interest in the long run. For example, the accelerated bi-weekly payment allows you to pay half of your monthly payment every two weeks. You will therefore make 26 payments a year, the equivalent of one extra monthly payment a year.
The number of term years.
Your Income and Anticipated Expenses
Note: If your down payment is less than 20%, you will have to qualify for a mortgage based on the 5 year fixed rate, even if you are planning to choose a shorter term with a lower interest rate.