The term describes how long the current agreement runs. Amortization describes the planned repayment period. Keep both visible when comparing a mortgage.
1. Draw two separate timelines
Write the term end date on one line and the estimated repayment completion on another. The end of the term usually does not mean the entire balance has been repaid. Your renewal conversation deals with the balance that remains.
2. Check what a lower payment changes
Ask whether a lower proposed payment comes from a different rate, a longer repayment period, or both. Request a comparison using the same balance and amortization before evaluating the effect of changing the amortization.
3. Review again at renewal
Compare the proposed repayment period with your original plan and the years remaining on your current statement. Ask for an explanation if the new schedule extends the debt further into the future.
Questions to bring to our conversation
- When does this agreement end?
- When is the debt projected to be repaid?
- Is the new offer extending my repayment schedule?
Further reading: FCAC: Choosing a mortgage. General information; lender requirements and individual circumstances vary.