How Extending Your Amortization Can Help With Affordability

In today’s real estate market, many homebuyers and homeowners are feeling the pressure of higher interest rates and rising living costs. Whether you're purchasing your first home, refinancing, or considering a mortgage renewal, one tool that could improve your monthly affordability is extending your amortization period.

But what does that mean—and how could it help? Let’s break it down.

What Is Amortization?

Amortization refers to the total length of time you agree to take to pay off your mortgage in full. In Canada, this typically ranges from 25 to 30 years, though under certain conditions, it can be longer.

Your amortization period affects how much principal and interest you pay each month. Shorter amortizations mean higher monthly payments but less interest paid over time. Longer amortizations spread the payments out, reducing monthly costs.

Why Would You Extend Your Amortization?

The number one reason: monthly affordability.

When you extend your amortization, your mortgage payments are spread out over a longer period, which usually results in lower monthly payments. This can provide immediate breathing room in your monthly budget—something that’s especially helpful if you're navigating:

• Rising interest rates

• Higher cost of living

• A new home purchase at a higher price point

• A mortgage renewal with increased payments

Understanding all of your options when getting a mortgage, including amortization length can be confusing. That's where a mortgage professional can help.

A Quick Example

Let’s say you're carrying a $400,000 mortgage at a 5% interest rate:

• On a 25-year amortization, your monthly payment would be approximately $2,326.

• On a 30-year amortization, that drops to roughly $2,134.

That’s a savings of around $192/month—money that can go toward groceries, utilities, or other essentials.

Important Considerations

While a longer amortization reduces monthly payments, it also means:

• You’ll pay more interest over the life of the loan

• It could take longer to build equity in your home

That said, for many homeowners, the short-term cash flow relief outweighs the long-term cost—especially if the goal is to improve day-to-day financial flexibility.

And remember, if your circumstances improve later, you can always make extra payments or shorten your amortization when you renew.

Is It Right for You?

As a Saskatoon mortgage professional, my role is to help you understand all the tools available to you—including amortization strategies. If you're feeling the pinch and wondering whether an extended amortization could help your situation, let’s talk. I’ll walk you through your options and help tailor a solution that fits your budget and long-term goals.

Let’s make homeownership more manageable—together.📞 Contact me today to explore the right mortgage solution for your situation.