Definition
The repayment period is the length of time you have to repay a loan. For a mortgage, it's the full loan term. For a HELOC, it's the period after the draw period ends, when you can no longer borrow money.
Understanding Repayment Periods
The repayment period is an important part of the mortgage process, typically decided when you finalize your loan. It determines how long you'll make payments on your mortgage. In simple terms, a longer period means smaller monthly payments but more total interest over time. Example: A 30-year repayment period on a $200,000 loan might have lower monthly payments than a 15-year period. It's not just about the duration of the loan; it also impacts interest and overall costs. Many believe shorter periods always save money, but it's a balance between monthly budgets and total interest paid.
