If you have two loans of the same amount—one at a lower rate but shorter amortization and the other at a higher rate but longer amortization—you will see that your payment on the first loan would be higher. Having said that, your interest savings would be bigger because you are paying off the loan over a shorter period at a lower rate.

Extending amortization is a way to lower your monthly payment on a loan as the rates rise. As increasing the amortization will extend the life of the mortgage, discuss with your mortgage advisor alternative methods using the prepayment options to pay down the loan over the original amortization time horizon.