Definition
Amortization is the total period, in years, over which your mortgage payments are calculated to bring the balance to zero. Do not confuse amortization (total duration) with term (duration of the current contract, typically 1 to 5 years).
In Canada in 2026, two regulatory caps apply: 25 years maximum for an insured mortgage (LTV > 80%, so down payment < 20%), 30 years maximum for a conventional mortgage at most OSFI-regulated lenders. A recent exception: since August 1, 2024, first-time buyers can access 30-year insured amortization on certain new builds, and since December 15, 2024, on purchases of new or existing properties (federal announcement September 12, 2024).
Extending amortization lowers the monthly payment but increases total interest cost. On CA$400,000 at 5%, moving from 25 to 30 years cuts the monthly payment by about 13% but raises total interest by about 23%. Many lenders allow penalty-free prepayments (15-20%/yr privilege) that bring effective amortization closer to contractual.