Choosing Your Mortgage Amortization in Canada: 15, 20, 25, or 30 Years
Your amortization period is how long it would take to pay off your mortgage in full if you made every scheduled payment and never made an extra one. It directly determines your monthly payment and, more importantly, the total amount of interest you pay over the life of the loan. The difference between a 15-year and a 30-year amortization on a large Canadian mortgage can exceed $300,000 in interest.
The numbers: $600,000 mortgage at 4.99%
| Amortization | Monthly payment | Total interest | Total cost |
|---|---|---|---|
| 15 years | $4,739 | $253,000 | $853,000 |
| 20 years | $3,963 | $351,000 | $951,000 |
| 25 years | $3,480 | $444,000 | $1,044,000 |
| 30 years | $3,196 | $550,000 | $1,150,000 |
Moving from 25 to 15 years saves approximately $191,000 in interest — and moving from 30 to 25 years saves another $106,000. These are not marginal differences.
Use our calculator to run your own numbers with your specific mortgage amount and rate.
Amortization vs term: the distinction that confuses everyone
Your amortization is the full repayment schedule (e.g., 25 years). Your term is how long your current rate is locked in (e.g., 5 years). At the end of each term, you renew — and you can adjust your amortization at that point. This means a 25-year amortization mortgage typically involves five or six separate 5-year terms, each at a different rate.
What length can you actually choose?
For conventional mortgages (20% or more down, no CMHC insurance), most lenders offer amortizations from 5 to 30 years, and some will go longer.
For insured mortgages (less than 20% down), the rules changed in 2024. First-time buyers and buyers of new builds can now access 30-year amortizations. All other insured mortgages remain capped at 25 years.
Case for a shorter amortization (15–20 years)
- You plan to retire in under 20 years and want to be mortgage-free before you do.
- Your income is stable and the higher payment is well within your GDS ratio.
- You have no high-interest debt and no better use for the extra cash flow.
- You're buying a starter home and expect to move in under 10 years — you'll build equity faster and come out ahead on the next purchase.
Case for a longer amortization (25–30 years)
- You're at the upper end of affordability and every dollar of monthly payment matters.
- You have other high-interest debts to pay down first (a shorter mortgage at 5% is never more urgent than credit card debt at 20%).
- You want the optionality: qualify at the lower payment, then make prepayments voluntarily when cash allows — without being locked into the higher required payment.
- You're early in your career and expect your income to grow meaningfully.
The "long amortization plus prepayments" strategy
One approach worth considering: take the longer amortization but pay as if you had the shorter one. Most Canadian mortgages allow you to increase your regular payment by 10–20% per year and make annual lump-sum prepayments of 10–20% of the original principal — without penalty. This gives you the flexibility of a lower required payment while achieving the interest savings of a shorter amortization if you're disciplined.
Model this in our prepayment calculator to see exactly how much time and interest you'd save.
What about equity?
Shorter amortizations build equity faster because more of each early payment goes to principal. On a 25-year mortgage at 4.99%, about 61% of your first payment is interest. On a 15-year mortgage at the same rate, that drops to 45%. After 5 years, a 15-year amortization borrower has paid down about $95,000 more principal than a 25-year borrower — meaningful equity if you need to sell or refinance.
