Raj Moondi
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Mortgage Term The overall amortization period of a mortgage is generally broken up into shorter time sections named Terms. A term is the period of time where your mortgage loan will be subject to a specific set interest rate, and can be as short as a few months or as long as 25 years. When the term expires, you must then renew your mortgage for the next term at whatever the prevailing interest rates are at that time. Mortgage rates have varied from well over 20% in the 1980s to just a few percentage points in the early 2010s, so a mortgage renewal in the future always entails an element of risk. In conventional mortgage terms, the longer the period of time, the higher the interest rate will be that is applied to that term. Here is an example based on a 25 year amortization.