Amortization explained
Amortization describes how a mortgage is structured so that a fixed payment, made on a set schedule, fully repays the loan by a target date. In the early years, most of each payment goes toward interest because the outstanding balance is large; over time, as the balance shrinks, a larger share goes toward principal. This shifting split is captured in an amortization schedule.
In Canada, mortgages are typically amortized over 25 years, though 30-year amortizations are available on uninsured (conventional) mortgages and, more recently, on certain insured purchases for first-time buyers of new builds. A longer amortization lowers each payment but increases total interest paid over the life of the loan.