What is the difference between mortgage term and amortization?
When it comes to mortgages, there are two important terms to understand: mortgage term and amortization. The mortgage term is the length of time a borrower commits to a specific interest rate, payment schedule, and lender. This can range from as little as six months up to 10 years or more. On the other hand, amortization refers to the length of time it takes to pay off the entire mortgage, which can be as long as 25 to 30 years. While these terms may sound similar, they can have a significant impact on your monthly payments and overall financial outlook. It’s important to understand the difference between them to make the best decision for your unique situation.