Amortization Period – The Long and Short of It. Shorter is better when choosing an amortization period for your mortgage. Your amortization period is the number of years it will take you to pay off the full balance of your mortgage and not to be confused with the mortgage term. A longer amortization period is good if you want to buy a house sooner and have lower mortgage payments and by increasing the years on the term can allow you to do that and for some can be the difference between purchasing and not purchasing a home. If your down payment is less than 20% the standard period has been 25 years, but you can save money and pay off your mortgage sooner by shortening that period.
Want to know why Shorter’s Better?
Shortening the mortgage amortization period can save thousands off the interest you pay, plus you own your home sooner. If you’re in a position to pay more per mortgage payment, a shorter amortization would be ideal. By choosing a shorter term, it is better as an investment as this can be the most important investment you will make in your life. In the end, you will have financial wellness and peace of mind. Your home should be your security, your retirement security, and future.
You can even change your amortization period. Maybe you’ve chosen a longer amortization period, say 25 years based on circumstances, but now your financial situation has improved, you can change the amortization period and it does not mean you have to stay with it throughout the life of your mortgage. It’s good financial sense to re-evaluate your amortization every time you renew your mortgage and if you are in a better position, choose shorter.
If you want to know just how much money you can save by choosing a shorter amortization period , check out our Mortgage Payment Calculator . We have more money saving best mortgage rates you can compare if you’re thinking of refinancing or renewing your mortgage.
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