Your mortgage term is the period that your mortgage rate is locked in. For example, if you obtain a 5-year fixed-rate mortgage at 2.29%, your mortgage rate would stay at 2.29% for the full five years, no matter what happens in the marketplace. A variable rate mortgage will fluctuate with the prime rate over your term, but it's relation to the prime rate (for example, Prime – 0.45%) will stay the same for the entire term.
Mortgage terms vary in length. You can choose a term as short as six months, or as long as ten years, but five years is the most common option. When selecting a term, keep in mind that breaking the term early can result in penalties and fees, so try and choose a term that makes sense for your situation. For example, if you plan to be in the home for more than five years, choose a five-year term. If there is a good chance you or your partner have to relocate for work, a shorter term will have lower penalties if you have to break your mortgage term early.
At the end of your mortgage term, you'll renew your mortgage with a new interest rate and new term.