Mortgage Term

• Mortgage term: This refers to the length of time that a borrower commits to a particular mortgage rate, lender, and conditions. For example, a 5-year mortgage term means that the borrower has agreed to a specific interest rate and conditions for a 5-year period. After that period, the borrower may renew the mortgage for another term or negotiate new terms with the lender.

• Amortization: This refers to the process of paying off a mortgage over time through a series of regular payments. It is the length of time it takes to pay off the entire mortgage loan, typically expressed in years. For example, a 25-year amortization period means that the borrower has agreed to make regular payments over 25 years until the entire mortgage is paid off.

It’s important to note that the mortgage term and amortization are not the same thing. The term refers to the length of time that a borrower commits to a particular interest rate and lender, while the amortization period refers to the length of time it takes to pay off the entire mortgage through regular payments. When a borrower renews their mortgage at the end of the term, they may choose to keep the same amortization period or change it.