The mortgage rate type can be fixed for the duration of the term or variable, fluctuating with the prime rate. The mortgage term is the length of time you commit to the terms, conditions and mortgage rate with a specific lender. The mortgage type includes the term of the mortgage, between 1-10 years, and the rate type, variable or fixed. Longer amortization periods allow homeowners to make smaller monthly payments, but equate to more interest paid over the life of the mortgage.

In Canada, the maximum amortization period for insurable mortgages is 25 years. The length of time it will take a homeowner to pay off his/her mortgage. Mortgage default insurance is calculated as a percentage applied to your mortgage amount. Mortgage default insurance is required on all mortgages with down payments of less than 20%, which are known as high ratio mortgages. Mortgage default insurance, commonly referred to as CMHC insurance, protects the lender in the case the borrower defaults on the mortgage. For down payments of less than 20%, home buyers are required to purchase mortgage default insurance, commonly referred to as CMHC insurance. The minimum down payment in Canada is 5%. The amount of money you pay up front to obtain a mortgage.

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