JayVanular

Jay Vanular
Sales Representative

Right at Home Realty Inc., Brokerage
1032 Brock Street S, Whitby ON
Unit 5&6, L1N 4L8
Cell:905-718-9927
Direct Office: 905-665-2500
Email: jay@jayvanular.com

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What is the difference between Term and Amortization?

The "term" of the mortgage should not be confused with the "amortization". The amortization of the mortgage refers to the entire length of time that it will take for the mortgage to be paid and the house to be thusly, "free and clear". The term is the period for which your current payment obligations are valid. In other words, you may choose a five-year term and a 25-year amortization. This would mean that your interest rate, your payments, and your pre-payment options would be the same for the next five years. At the end of these five years you would re-negotiate the term, and the amortization would now be 20 years. Fixed rate Mortgages can be "closed" or "open".

Open Mortgages

Allow one to pre-pay some, or all of, their outstanding mortgage obligation at any time, without penalty. Generally, open mortgages have a six-month, and a one-year term option with higher interest rates than closed mortgages of the same term length.

Closed Mortgages

Generally, closed mortgages are offered in terms ranging from six months to ten years. Generally, closed mortgages offer more stringent pre-payment options subject to various pre-set regulations. For most people, such pre-payment options can be vital to reducing the amortization of one's mortgage and should be properly discussed with one's lender/agent.

 
on 22/05/2014 by Super User
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470 BOND ST, Oshawa - $399,990
470 BOND ST, Oshawa
Perfect Home For First Time Buyers, Downsizers Or Investors! Don't Let The Market Leave You Behind--This Is Your Opportunity To Own A Home Cheaper Than Renting! Solid Brick Bungalow Centrally Located With Tons Of Parking. Sunny & Bright, Super Clean
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6 THOMAS WOODLOCK ST, Clarington - $559,900
6 THOMAS WOODLOCK ST, Clarington
Ok So Where Do We Begin? Maybe W/The Upgrades! Cesar Stone Countertops, Marble Ribbon Backsplash, Extended Cabinets & Gorgeous Backyard. Less Than 5Yrs Old, This Stunning Bungaloft Features 9' Ceilings, Open Concept Kitchen O/L Great Room W/Gas Fp.
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#108 -17 BALDWIN ST, Whitby - $469,000
#108 -17 BALDWIN ST, Whitby
Retail Condominium In The Heart Of Brooklin. Bank Anchored Plaza. Hwy 7 And Hwy 12. No Food Prep, Odour Producing Or Wet Uses Allowed As Per Condo Rules And Regulations. It Is Dscc No.280 And Includes Snow Removal, Garbage, And Common Elements. It
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