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Graph representing the rise in mortgage interest rates drawn on a chalkboard lying on a wooden table. A model of a house with a red roof is on the chalkboard.

Short-term vs Long-term Mortgage: Which Is Right for Me?

As experienced mortgage brokers, we at The Mortgage Station make it our mission to ensure you understand your options when it comes to mortgages. In this blog, we’re going to shed some light on two critical types of mortgage products – short-term mortgages and long-term mortgages – and which is right for you. 

Together, we’ll dive into the advantages and disadvantages of short-term vs long-term mortgages and the difference between a mortgage term and amortization.

Have questions? Call us now and speak to an experienced mortgage broker.

Table of Contents

  1. What Is a Short-term vs Long-term Mortgage?
  2. Mortgage Term vs Amortization
  3. Mortgage Calculator for Short-term and Long-term Options
  4. Is a Short-term Mortgage or Long-term Mortgage Right for You?
  5. FAQs

What Is a Short-term vs Long-term Mortgage?

The mortgage market offers various options when it comes to mortgage term length.

 A short-term mortgage typically has a term of fewer than five years. 

On the other hand, a long-term mortgage, or extended mortgage, usually has a term that extends over a period of more than five years. 

Both come with their own sets of advantages and potential drawbacks.

Short-term Mortgage: Quick Facts

Short-term mortgages may offer the advantage of lower interest rates, translating to less money spent on financing costs. They’re a fantastic option if you’re planning to pay off your mortgage in a short period or believe that interest rates will decrease in the near future.

However, keep in mind that with a short-term mortgage, you may face higher monthly payments and the need to renew your mortgage more frequently, potentially resulting in multiple renewal fees should you decide to switch lenders. It’s also impossible to time the market, and you run the risk of facing higher interest rates upon renewal. 

Learn more about what makes mortgage rates rise.

Long-term Mortgage: Quick Facts

The most significant benefit of a long-term mortgage is the stability it provides. Your interest rate and payments are fixed over a prolonged period of time, helping you avoid the risk of rising interest rates should the market take a turn. This type of mortgage can be ideal if you anticipate interest rates will rise in the future, or if you prefer consistent, predictable payments.

However, long-term mortgages often have higher interest rates than their shorter-term counterparts, and there will be hefty penalty fees if you choose to break your mortgage agreement early.

Discover what factors determine your mortgage rate.

Mortgage Term vs Amortization

The mortgage term and amortization are two crucial components of any home financing package.

The mortgage term refers to the length of time you’re committed to a particular mortgage rate, lender, and conditions. At the end of the term, you’ll need to renew your mortgage agreement or repay the loan in full.

Amortization, on the other hand, refers to the total length of time over which your mortgage will be completely paid off, assuming the interest rate remains relatively the same. 

It’s important to note that your mortgage term and amortization are not the same; a mortgage can have multiple terms within its amortization period.

Mortgage Calculator for Short-term and Long-term Options

Use our handy Mortgage Calculator to explore different short-term and long-term mortgage scenarios based on our current rates! This tool can help you see how changes in term length and interest rates could impact your monthly payments and the overall cost of your loan.

Is a Short-term Mortgage or Long-term Mortgage Right for You?

Choosing between a short-term mortgage and a long-term mortgage depends on several factors, including your financial stability, risk tolerance, and future plans. 

When making your decision, consider the following:

  • If you expect your income to increase in the future or anticipate lower interest rates, a short-term mortgage could be a good option.
  • On the contrary, if you prefer stability and predictability in your payments, a long-term mortgage may be more suitable.


What happens if I want to break my mortgage term early?

Breaking your mortgage term early could result in breakage costs or early termination fees. It’s crucial to understand these potential costs when signing your mortgage agreement.

Can I switch from a short-term to a long-term mortgage or vice versa?

Yes, you can switch between short-term and long-term mortgages when you renew your mortgage. Consider factors such as your current financial situation, expected changes in income, and potential interest rate fluctuations when making this decision.

What can I do if I can’t decide between a short-term or long-term mortgage?

The Mortgage Station offers various mortgage products that cater to different needs. Our knowledgeable team is here to provide you with advice based on your unique financial goals.

Speak to a licensed mortgage broker now.

Find the right mortgage for your financial goals with the help of the experts at The Mortgage Station!

Your individual circumstances, financial goals and risk tolerance are ultimately what will decide whether a short-term mortgage or a long-term mortgage is a better fit for you. When it comes to knowing the ins and outs of your mortgage product, understanding the terms, interest rate, and potential penalty fees are key before making a commitment. 

But you don’t have to do it alone. Remember, here at The Mortgage Station, we are dedicated to helping you make these important financial decisions with confidence and peace of mind. 

Don’t hesitate to reach out to our expert team by email at or by phone toll-free at 1-877-512-0007 for personalized advice. We are always here to help!

by | Sep 21, 2023 | Uncategorized