Amortization

Explore amortization in Canadian real estate, how it affects mortgage repayment, interest costs, and homeownership planning.

Amortization
Escrow – Definition, Meaning, and Examples in Canadian Real Estate

May 22, 2025


What is Amortization?

Amortization refers to the process of gradually repaying a mortgage through regular payments over a fixed period of time.

Why Amortization Matters in Real Estate

In Canadian real estate, the amortization period determines the length of time it will take to fully pay off a mortgage. It impacts the size of monthly payments and total interest paid over the life of the loan.

Typical amortization periods:

  • 25 years for insured mortgages
  • Up to 30 years for uninsured mortgages

Amortization is distinct from the mortgage term, which defines the current contract period. The mortgage is typically renewed multiple times within the amortization schedule.

Understanding amortization helps buyers compare mortgage options and manage long-term affordability.

Example of Amortization

A homeowner selects a 25-year amortization and a 5-year term. They will renew the mortgage several times until the full loan is repaid.

Key Takeaways

  • Total time to repay a mortgage in full.
  • Affects monthly payment size and total interest.
  • Different from mortgage term.
  • Can be extended or shortened with refinancing.
  • Crucial for long-term budget planning.

Related Terms

Additional Terms

Public Realm Improvements

Public realm improvements are enhancements to public spaces such as sidewalks, parks, plazas, and streetscapes, often funded or contributed by. more

Mortgagee in Possession

A mortgagee in possession is a lender who takes control of a property after borrower default, but before foreclosure or power of sale. The lender. more

Lease Surrender Agreement

A lease surrender agreement is a negotiated contract between a landlord and tenant that ends a lease before its scheduled expiration. Terms may. more

Green Infrastructure

Green infrastructure refers to natural or engineered systems that manage stormwater, reduce heat, and improve sustainability in developments.. more

Escrow Holdback

An escrow holdback is a portion of funds withheld at closing and held in escrow until specific conditions are met, such as completion of repairs,. more

Underused Housing Tax

The Underused Housing Tax (UHT) is a federal annual 1% tax on the value of vacant or underused residential property owned by non-resident,. more

More For You

Ontario Expands HST Rebate, Eliminates Tax On New Homes Up To $1M

Ontario Expands HST Rebate, Eliminates Tax On New Homes Up To $1M
Toronto skyline/Shutterstock

Ontario is moving to take a bigger swing at housing affordability — this time by scrapping the HST on new homes for a broader pool of buyers.

As part of its 2026 Budget, the Government of Ontario says it will remove the full 13% Harmonized Sales Tax for eligible purchasers of new homes priced up to $1 million, translating to a maximum rebate of $130,000. That max rebate would also extend to homes valued up to $1.5 million, before phasing down on a sliding scale to $24,000 for homes priced at $1.85 million and above.

Keep ReadingShow less

OREA Pushes For Development Charge Reform, Makes Several Recommendations

OREA Pushes For Development Charge Reform, Makes Several Recommendations

(OREA)

There is no easy way to control consumer sentiment, macroeconomic conditions, or the cost of construction materials (let alone tariff threats from our neighbour), which is a big reason why the real estate industry has been so focused on development charges (DCs) in recent years.

Development charges are levied by governments on new construction, and are used to fund new infrastructure, under the premise that “growth pays for growth.” When the real estate market was strong, development charges were tolerable because homes could be sold for a high enough price to cover them.

Keep ReadingShow less

Meet The Agent: Daniel Kim, Sotheby's International Realty Canada

Meet The Agent: Daniel Kim, Sotheby's International Realty Canada

Welcome to Meet the Agent, an ongoing series profiling real estate agents from across Canada. With more than 150,000 agents, brokers, and salespeople working in 75 different boards and associations across the country, we thought it was about time they had a place to properly introduce themselves.

If you or someone you know deserves the same chance, email agents@storeys.com to apply.

Keep ReadingShow less

Bank Of Canada Holds Interest Rate Steady In Second 2026 Decision

Bank Of Canada Holds Interest Rate Steady In Second 2026 Decision

The Bank of Canada left its overnight rate at 2.25% on Wednesday — as many of the nation's banks had predicted — keeping borrowing costs steady as global and domestic developments continue to shape the economic outlook.

Volatility has spiked since the outbreak of conflict in the Middle East, with oil and natural gas prices rising sharply, and financial markets tightening.

Keep ReadingShow less

Where Every Big Bank Stands On Tomorrow’s Interest Rate Announcement

Where Every Big Bank Stands On Tomorrow’s Interest Rate Announcement
Bank of Canada/X

After a month hiatus, another Bank of Canada (BoC) interest rate announcement is scheduled for tomorrow morning — Wednesday, March 18. We’re going into this decision with a policy rate of 2.25% after two consecutive holds at the December and January 2025 announcements.

“Governing Council judges the current policy rate remains appropriate, conditional on the economy evolving broadly in line with the outlook we published today,” the BoC said in a statement in January. “However, uncertainty is heightened and we are monitoring risks closely. If the outlook changes, we are prepared to respond.”

Keep ReadingShow less

Chartwell To Sell Waterloo Asset To Resolve Competition Bureau Concerns

Chartwell To Sell Waterloo Asset To Resolve Competition Bureau Concerns

Chartwell Clair Hills at 530 Columbia Street West in Waterloo. (Chartwell)

Last summer, Chartwell Retirement Residences (TSX: CSH.UN) announced that it had reached an agreement to acquire a portfolio of six seniors housing communities located in southwest Ontario for $432 million, continuing to expand its footprint in the region.

The portfolio of six properties represented the entire seniors housing portfolio of Ontario-based Sifton Properties and totalled to 1,024 suites (plus 29 additional units under construction), split between the following six properties:

Keep ReadingShow less

Canada Housing Starts Hold Steady In February: CMHC

Canada Housing Starts Hold Steady In February: CMHC

Canada’s housing construction trend remained largely unchanged in February, even as monthly starts ticked higher, according to new data from the Canada Mortgage and Housing Corporation.

CMHC reported that the six-month trend in housing starts — measured as the six-month moving average of the seasonally adjusted annual rate (SAAR) — edged up 0.4% in February to 256,005 units.

Keep ReadingShow less

Gupta Group Tweaks ‘Yonge City Square’ In Favour Of Larger Family-Sized Units

Gupta Group Tweaks ‘Yonge City Square’ In Favour Of Larger Family-Sized Units

Rendering of the Young City Square under construction in North York/The Gupta Group, Arcadis

We're in the midst of a push to build more family-sized units in Toronto, and a proposed change to The Gupta Group’s Young City Square project is sympathetic to that.

The 32- and 14-storey development at 4050 Yonge Street in North York was first proposed in February 2020, launched presales in March 2023, and has been under construction since December 2024.

Keep ReadingShow less
Privacy PolicyAbout UsTerms of UseAdvertise with UsJobsContact UsRSS Feed
All rights reserved SiteMedia © 2026.