When you take out a mortgage, there is a set time determined for the mortgage to be paid in full. This is often around 20 years. This is called the amortization period. The mortgage will be "amortized" over 20 years, after which time it is paid in full.
The other thing involving a time frame is the set time before your mortgage is up for renewal. Say, when you take out a mortgage, you opt for a 5 year term. This means after 5 years your mortgage is up for renewal. There is still a balance owing on the mortgage, but at this time you renegotiate a further term for the mortgage at whatever interest rate is available at that time. You can renew your mortage after 6 months, 1 year, 2 years, etc. Renewal is a good thing if mortgage rates have gone down since you initally took out the mortgage, but they can also go up over that same time frame and then you are locked in for a further term at a higher interest rate. It's a crap shoot really, trying to determine when rates may go down.
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08-05-2008, 12:49 PM
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