What is the amortization period for Bobby-Sue's mortgage?

The amortization period is the length of time it takes to pay off a mortgage loan through regular payments. This choice being 30 years reflects a common practice in mortgage agreements, particularly for residential properties, as it allows borrowers to spread their payments over a longer term. This can result in lower monthly payments compared to shorter amortization periods, although it typically means that more interest will be paid over the life of the loan.

In many markets, including Saskatchewan, 30 years is often the standard amortization period for mortgages, striking a balance between manageable monthly payments and the borrower’s overall financial strategy. It provides sufficient time for homeowners to build equity and is favored by many because it can make homeownership accessible to a broader range of individuals, especially first-time buyers who may have budget limitations.

The other choices reflect shorter amortization periods, which generally lead to higher monthly payments. While these shorter periods can result in less total interest paid over the life of the loan, they may not be practical for every borrower, particularly those prioritizing lower monthly expenses. Thus, the selection of 30 years aligns with common practices in mortgage lending.