Mortgage Term
A mortgage term is the period during which the interest rate, payment structure, and key conditions of the mortgage are fixed. Terms are commonly shorter than the full amortization period, meaning most borrowers renew multiple times before the mortgage is fully paid off.
At renewal, the lender can offer new rates and conditions, and the borrower can choose to stay, refinance, or switch lenders. Term length affects payment stability, flexibility, and potential penalties if you break the mortgage early.
Why this matters:
Many borrowers confuse the mortgage term with the amortization period. Understanding the difference helps you plan renewals, avoid penalties, and choose the right balance of flexibility and rate security.
Related Mortgage Terms
Often confused with:
Amortization Period — Amortization is full payoff timeline; term is the contract segment.
Closely related:
Fixed-Rate Mortgage — Fixed applies for the term.
Closed Mortgage — Restrictions typically apply during the term.
Next step:
Closed Mortgage — Understand restrictions that often come with common term products.