15 Year Mortgage Amortization Periods

Updated Jan 19, 2021

Fact checked

1 - 5 of 5

Name	Product	Interest Rate (APR)	Loan Term	Min. credit score	Provincial availability
CASHBACK nesto Mortgages nesto Mortgages	CASHBACK	4.89%	5 Year Fixed Rate	680	All of Canada	Get 1% cashback on your mortgage value (up to a total cashback of $9,250).	Go to site More Info	Compare	loading Fetching your data...
CASHBACK BMO Mortgages BMO Mortgages	CASHBACK	6.49%	5 Year Fixed Rate	Varies	All of Canada	For a limited time, enjoy interest savings with a new BMO Insured Mortgage. Offer ends November 28, 2022	Go to site More Info	Compare	loading Fetching your data...
Tangerine Mortgages Tangerine Mortgages		5.59%	5 Year Fixed Rate	620	All of Canada	Secure a mortgage rate for up to 120 days. Make lump sum prepayments up to 25% of your original mortgage amount each year.	Go to site More Info	Compare	loading Fetching your data...
Meridian Mortgages Meridian Mortgages		5.49%	5 Year Fixed Closed Rate	600	ON	Meridian is a credit union that provides Ontario residents featured rates and the option to defer one payment every 12 months without penalty.	Go to site More Info	Compare	loading Fetching your data...
Homewise Mortgages Homewise Mortgages		Varies	Varies	600	Not available in Quebec	Homewise's personal advisors can get you mortgage rates from over 30 banks and lenders.	Go to site More Info	Compare	loading Fetching your data...

Compare up to 4 providers

We compare the following lenders

A 15-year mortgage isn’t the most popular amortization period because the monthly payments are much higher than that of, say, a 25-year period. But if you can make the payments, you stand to save thousands of dollars in interest over the life of your mortgage.

How does a 15-year mortgage compare to other amortization periods?

As you may have guessed, 15-year mortgages are paid off in 15 years — just over half the time of the most common 25-year mortgage. While a 15-year amortization period is not the most popular option, it’s viewed very positively because homeowners will own their home much faster and pay much less in interest over the life of the mortgage.

But the trade-off for lower interest and a quicker payoff period is higher monthly payments. Let’s say you’re looking at a $200,000 15-year fixed-rate mortgage with an interest rate of 3%. You’ll pay approximately $1,379.38 in mortgage payments each month and a total of $48,287.82 in interest over the life of the mortgage.

If you compare this with a 25-year fixed rate mortgage at 3%, you might pay approximately $946.49 per month in payments, but a staggering $83,947.30 in interest over time – and this doesn’t even include the closing costs and ongoing expenses like condo fees, utilities and maintenance fees, home insurance and mortgage insurance (if you put down less than 20%).

For a $200,000 mortgage …

Mortgage term	Monthly Payment	Total Interest Paid	Savings
10 years	$1,929.50	$31,540.01	$16,747.81
15 years	$1,379.38	$48,287.82	$17,472.80
20 years	$1,107.34	$65,760.62	$18,186.68
25 years	$946.49	$83,947.30	$18,886.60
30 years	$841.21	$102,833.90	$19,569.88
35 years	$767.63	$122,403.78	–

This is sample data. The rate you’re offered will depend on the loan term, the interest rate (fixed vs. variable, your down payment, credit score and income. Thanks to the high monthly payments, it’s usually harder to qualify for a 15-year mortgage than it is for a 20-, 25- or 30-year mortgage.

For a more detailed explanation of mortgages, check out our guide here.

What are the benefits of a 15-year mortgage?

A 15-year mortgage has helpful benefits including:

Less interest. You’ll pay much less interest over the life of your mortgage than you would with a longer amortization period.
Shorter payoff period. Pay off your home almost twice as fast as you would with a 25-year mortgage.
Build equity faster. Pay down the principal balance and increase your equity at a faster pace.
Stable payments. Opt for a fixed-rate mortgage and your monthly payment won’t fluctuate, even if the market does.

What should I watch out for?

Although you’ll save money and own your home faster, taking out a 15-year mortgage does have pitfalls:

Higher monthly payments. You’ll typically pay hundreds more per month than you would on a mortgage amortized over a longer period.
Modest or limited housing options. Since the payments are higher, you may qualify for a less expensive property than if you’d stretched the mortgage out over 20-, 25-, 30- or 35- years.
Stricter eligibility requirements. You’ll need to prove you have a strong credit history and sufficient income to make your higher monthly payments.
Tight cashflow. Having a shorter amortization period doesn’t leave much room for any cashflow shortages during financially tough times. Should you lose your job or have financial difficulties, a higher monthly payment might see you defaulting on your mortgage.

Is a 15-year mortgage right for me?

With a 15-year mortgage, you need to be disciplined with your budget. If you can afford the monthly payments while still saving for the future, a 15-year mortgage may be the right fit for you.

This term could also be attractive to borrowers who want to be debt free by the time they retire. It could be beneficial for those who want to tap into the equity in their home to cover large expenses such as renovations.

On the other hand, if your income is unstable or you’re interested in investing more of your money, you may want to opt for a longer amortization period.

Variable rate vs fixed-rate 15-year mortgages

Variable rate mortgages come with fluctuating interest rates that are not fixed for the mortgage term. A variable rate is typically expressed as the prime rate + or – a number. The prime rate can change based on the economy and is determined by the Bank of Canada’s overnight rate. While you might wonder why anyone would want to risk rising interest rates, a variable rate is usually fairly lower than a fixed-rate, especially for the first few years that you pay your mortgage. Over the life of the mortgage, a variable rate can save you a fair amount of money – if the prime rate stays competitive for the long run.

For a more detailed explanation of variable rate mortgages, check out our guide here.

A fixed interest rate, on the other hand, will stay fixed for the term – whether that’s as low as 6 months or as high as 10 years. Once your term ends, you can refinance with the same lender or switch to another lender. A fixed-rate usually starts out higher than a variable rate, but may end up lower than the variable rate within a few years, again depending on the prime rate.

Learn more about fixed-rate mortgages here.

Which makes for the better choice depends on if you prefer knowing how much you’ll pay each month or whether you’re willing to take a risk on the prime rate staying low and competitive. What could be a better choice might be taking out a convertible mortgage, which allows you to reap the benefits of a low variable-rate for a few years and then switch to a fixed-rate mortgage once the prime rate rises. Another choice would be a hybrid or combination mortgage, which is usually a 50/50 combination of both a fixed-rate and a variable rate mortgage.

Which lenders offer a 15-year mortgage?

A handful of banks, online providers and credit unions offer 15-year mortgages. Since 25-years is the most popular amortization period in Canada, many homeowners start out with this amortization period and refinance to a shorter term, such as 15- or 20- years, once they know they can handle their repayments.

Bottom line

A 15-year mortgage is ideal for those who want to slash their interest payments and pay off their mortgage much faster. While borrowers benefit from paying less interest over the life of their mortgage, the trade-off is significantly higher monthly payments.

Not sure whether a 15-year amortization period is feasible? Compare the most common mortgage amortization period of 25-years in our guide here.

Frequently asked questions

Yes, once you term matures. If interest rates have dropped since you were approved for your mortgage or your rate isn’t as low as you’d like, you can refinance to get a better rate. You could also potentially refinance your mortgage to a longer – or shorter – amortization period. When you refinance, you’re applying for a new mortgage, so know that you may need to pay fees and closing costs.
You’ll need to put down at least 5%. Putting down less than 20% means you’ll need mortgage insurance, also known as CMHC insurance. Here are the current rules for down payments in Canada:
- If the purchase price of a property is less than $500,000, the minimum down payment is 5%.
- If the purchase price is between $500,000 – $999,999, the minimum down payment is 5% on the first $500,000 and 10% on any amount over $500,000.
- If the purchase price is $1,000,000 or more, the minimum down payment is 20%.

Thank you for your feedback!

How much interest would I pay on a $600,000 mortgage?30-year mortgage amortization period

More guides on Finder

Perch Mortgage review
Access innovative tools, fair pricing and expert mortgage support when you apply for a home loan with this reputable online broker.
Generation Rent: 9 million Canadians don’t believe they will ever be homeowners
Around 1 in 10 Canadians believe they will be renting forever. Read the full report to find out who is feeling hopeless about homeownership.
QuestMortgage review
Get pre-approved in minutes when you apply for an affordable and flexible mortgage with this offshoot of Questrade.
nesto Mortgages review
Apply for pre-approval and lock in the best rates when you compare lenders with this reputable online broker.
Neo Financial Mortgage Review
Compare mortgage rates on this innovative digital broker and get pre-approved for a mortgage in as little as 5 minutes.
Bank of Canada interest rate forecast report
Read Finder’s BoC Interest Rate Report for forecasts from some of Canada’s brightest minds in economics and learn more about how recent rate increases could affect Canada’s real estate market.
Condo vs a house: which one should you buy?
What to consider when buying a condo vs house or a condo vs townhouse.
Renting vs buying property in Canada
Not sure whether to buy or rent? Both have their benefits and drawbacks.
2021 New Home Wish List
More than 13 million Canadians planned to buy or rent a new home in 2021. Topping wish lists are space, style, luxury and outdoor amenities.
RBC Bank U.S. Mortgages Review
Get the support you need to navigate purchasing a home south of the border with this reputable US mortgage provider.

Ask an Expert

Click here to cancel reply.

You must be logged in to post a comment.

15-year mortgage amortization period