Mortgage payments are made up of a principal sum (the amount borrowed) and interest (the cost to you of borrowing money).
The best plan for any type of mortgage is to minimize the amount of interest you pay, here are a few ways to accomplish this:
- A larger down payment means your home ultimately costs less because a smaller mortgage means less interest.
- A shorter amortization, the period over which a loan is repaid.
- A weekly or biweekly payment schedule, instead of monthly.
- Additional lump sum payments.
Remember you don’t have to get your mortgage from the same place you have your savings or chequing accounts. At the end of each term you will be able to change the options of your mortgage such as the payment schedule, the term, the rate, even the mortgage lender. Be sure to consult with your broker before renewing your mortgage term.