As some homeowners extend their amortization well beyond the typical 25-year period, an analysis from found that overall mortgage costs could increase by nearly 180 per cent over a 90-year timeframe. 

A series of interest rate hikes from the Bank of Canada has brought variable-rate mortgages higher, a report from Tuesday said. As a result, some variable-rate holders with fixed payments have hit their trigger rate, which means their payments only cover the interest on their loan and not the principal, which has resulted in elongated amortizations, in some cases 90 years. 

“Currently, extended amortizations are a concern facing variable-rate mortgage holders with fixed payments, but mortgage holders who locked-in at a historically low fixed rate during the COVID-19 pandemic may also be faced with similar challenges when they come up to renew their mortgage,” Penelope Graham, the report's author and director of content at, said in a statement Tuesday to  

“These borrowers will likely have higher mortgage payments or will have to extend their amortization.” 

Assuming a total mortgage of $500,000 and a rate of 5.8 per cent, the report said that extending the amortization to 90 years from 25 would increase the total payment by 177 per cent, to $2,624,469.50. The total amount of interest would also increase by 374 per cent to $2,124,469.40. 

In that scenario, the analysis said that the extended amortization would lower monthly payments by 23 per cent, from 3,160.66 to $2,429.97. 

“While it’s anticipated that mortgage rates will remain elevated in the coming years, borrowers in this position might have the opportunity to make lump sum payments five to 10 years from now, when rates may be lower,” Graham said. 

However, Graham said the drastic increase in total payments and interest only applies to those who signed for a variable-rate mortgage with a fixed payment schedule amid historically low-interest rates at the time of the COVID-19 pandemic.

She said adjustable rate mortgage owners, and those with floating rates, have already “absorbed the impact of interest rate hikes from the Bank of Canada.”