- The amount of time, as written in the promissory note, for a borrower to repay a loan, such as a mortgage. Most conventional mortgages have a loan term of 5 or 10 years.
duration of term, loan duration, loan term length, term length, mortgage term length, mortgage term
Related Terms and Acronyms
- Amortization — Definition,
- Amortization refers to the process of gradually paying down the principal of a loan. Each payment toward the principal reduces your loan by that amount. This is different than an interest-only loan payment where the principal balance is never reduced. Amortization for a mortgage loan in Canada is normally 25 years, but can be as few as 5 years.
- Amortization Term — Definition,
- The time required to amortize (repay) an entire mortgage loan.
- Annual Mortgage Statement — Definition, Important,
- A report sent to the borrower every year, detailing how much principal remains on the home loan and how much was paid in taxes and interest during the previous year.
- Balloon Loan — Definition,
- A loan in which the payments aren't set up to repay the loan in full by the end of the term. At the end comes the balloon payment -- one that is larger than the other, periodic payments and pays off the remaining principal.
- Bridge Mortgage — Definition, Important,
- A short-term loan used to allow a homebuyer to purchase a replacement property while still trying to sell their existing home.
- Demand Loan — Definition,
- A loan that must be repaid in full, on demand.
- Loan — Definition,
- Letting another party use something of value temporarily.
- Loan Application — Definition,
- A document in which a prospective borrower details his or her financial situation to qualify for a loan.
- Lock-in — Definition,
- A lender's guarantee that the mortgage rate quoted will not change for a specific period. The borrower wants the lock to stay in effect until closing.
- Lump Sum Payment — Definition,
- An extra payment made to reduce a loan.
- One-time single-sum payment or payout.
- Promissory Note (PN) — Acronym,
- A written promise to repay a loan by a specified time.
- Remaining Term — Definition,
- The time it will take to pay off the rest of an instalment loan as scheduled.
- Term — Definition,
- The length of time you commit to repay a lender or bank at an agreed upon interest rate and payment schedule. The interest rate usually remains constant during this term unless the commitment states otherwise. For example, a five year fixed rate mortgage has a term of five years.
- Term Loan (TL) — Acronym, Important,
- A loan intended for medium-term or long-term financing to supply cash to purchase fixed assets such as machinery, land or buildings or to renovate business premises.