In short
Your 3 or 5 year term is just one chapter of it. When the term ends you renew, but the amortization keeps counting down.
A longer amortization means a lower monthly payment and more interest over the life of the loan. Extra payments and lump sums, within your lender's limits, take years off the clock.
How amortization works in Canada
Amortization is the full schedule for paying your mortgage down to zero. Your term, often 3 or 5 years, is just the rate agreement you have right now. When a term ends you renew, and the amortization keeps counting down from where it left off.
Every payment is split between interest and principal. Early on, most of each payment is interest. As the balance shrinks, more of each payment goes to principal, which is why equity builds faster in the later years.
The amortization you choose sets your regular payment. Your lender then calculates the payment needed to reach a zero balance by the end of that schedule, assuming the rate stays the same.
What is the maximum amortization in Ontario?
If your down payment is under 20%, your mortgage must be insured, and federal rules set the cap. Since December 15, 2024, insured mortgages can be amortized over up to 30 years for first-time buyers and for anyone buying a newly built home. Other insured buyers, such as repeat buyers of a resale home, are still capped at 25 years.
For the federal rule, a first-time buyer is someone who has never bought a home, or who hasn't lived in a home they or their current spouse or partner owned in the last four years. A new build means a home that hasn't been lived in before.
With 20% or more down, the mortgage is uninsured and each lender sets its own maximum. Thirty years is widely available, so check with your lender.
Shorter or longer: what changes?
A longer amortization lowers your monthly payment and can help you qualify, since lenders test affordability on the payment. The trade-off is more total interest over the life of the loan.
You can shorten the clock later. Most mortgages allow extra payments or lump sums each year up to a set limit without a penalty, and you can choose a shorter amortization when you renew. Limits vary by lender, so read your prepayment privileges.
If you renew at a higher rate, many lenders keep your remaining amortization and raise the payment. Others may offer to extend the amortization instead. Ask what happens at renewal so there are no surprises.
Common questions about amortization
What is the maximum mortgage amortization in Canada in 2026?
For insured mortgages, it is 30 years for first-time buyers and buyers of new builds, and 25 years for everyone else. That rule has applied since December 15, 2024. With 20% or more down, the mortgage is uninsured and lenders set their own limit, commonly up to 30 years.
What is the difference between amortization and mortgage term?
Amortization is the total time to pay the mortgage off, while the term is how long your current rate and conditions last. A typical buyer has a 25 or 30 year amortization made up of several shorter terms, each ending in a renewal.
Is a 30-year amortization a good idea?
It depends on your budget and goals, because it lowers your payment but raises the total interest you pay. Some buyers take 30 years for flexibility and then make extra payments when they can. A mortgage professional can show you both scenarios side by side.
Can I shorten my amortization later?
Yes, usually by using your prepayment privileges or choosing a shorter amortization at renewal. Extra payments go straight to principal, which cuts years and interest off the loan. Check your lender's annual prepayment limits so you don't trigger a penalty.
Sources
General information for Ontario, updated October 2026. Not legal, tax or mortgage advice. Rules change, so confirm with your lawyer, lender or the source above before you rely on it.