You probably know how much your mortgage payment is, but do you know what's in it? This will explain what's in a mortgage payment, and all the fun things you can do with it. Enjoy!

1. J A C K I E W O O D W A R D / / M O R T G A G E B R O K E R / / T M G
7 8 0 . 4 3 3 . 8 4 1 2 / / I N F O @ M O R T G A G E G I R L . C A
T W E E T @ M O R T G A G E G I R L C A
What’s in a
Mortgage Payment

2. What’s in a Mortgage Payment
I’m sure you know what a mortgage payment is, in the broad sense of the
word, it’s a scheduled repayment plan for the mortgage you’ve obtained
on a property.
Now let’s delve deeper into what a mortgage payment amount actually
includes, how payments can vary, along with how you can use your
mortgage payments to reduce your mortgage principle quicker.
I will try to cover the important details, as well as some helpful tips when
it comes to understanding your mortgage payment.
J A C K I E W O O D W A R D / / M O R T G A G E B R O K E R / / T M G
7 8 0 . 4 3 3 . 8 4 1 2 / / I N F O @ M O R T G A G E G I R L . C A
T W E E T @ M O R T G A G E G I R L C A

3. YOUR MORTGAGE PAYMENT IS COMPRISED OF 2 MAIN PARTS,
PRINCIPAL AND INTEREST.
PRINCIPAL BEING THE ORIGINAL MORTGAGE AMOUNT YOU
BORROWED WHILE INTEREST IS THE COST OF BORROWING
THOSE FUNDS. THE ONLY EXCEPTION TO THIS NORM IS
INTEREST ONLY PAYMENTS THAT SOME MORTGAGE
PRODUCTS FEATURE SUCH AS A HOME EQUITY LINE OF
CREDIT.
WHAT PORTION OF YOUR MONTHLY PAYMENT AMOUNT GOES
TOWARDS PRINCIPLE, AND WHAT AMOUNT GOES TOWARDS
INTEREST IS DETERMINED BY YOUR RATE TYPE.
What is included in your
mortgage payment

4. What’s in a Mortgage Payment
If you choose a fixed rate term, your mortgage payment is fixed and the
percentage of your mortgage payment that goes towards interest and
principle changes as the principle balance is reduced. Your mortgage
professional can create an amortization scenario to show you how the
percentages change throughout the length of your fixed term.
With a lower amortization, comes a larger mortgage payment, which
equates to more of your payment going towards principle, resulting in
your mortgage balance reducing faster.
J A C K I E W O O D W A R D / / M O R T G A G E B R O K E R / / T M G
7 8 0 . 4 3 3 . 8 4 1 2 / / I N F O @ M O R T G A G E G I R L . C A
T W E E T @ M O R T G A G E G I R L C A

5. What’s in a Mortgage Payment
With a variable rate mortgage term, the payment amount can fluctuate
though the percentage of payment that goes towards interest and
principle will also change as the balance reduces.
As a rule of thumb, it can be noted that the interest portion of the
mortgage is always covered first, with the remainder of the payment going
towards principle reduction.
Variable rates are especially appealing right now due to the low interest
rates offered which come with the possibility of more of a mortgage
balance reduction, more on that later.
J A C K I E W O O D W A R D / / M O R T G A G E B R O K E R / / T M G
7 8 0 . 4 3 3 . 8 4 1 2 / / I N F O @ M O R T G A G E G I R L . C A
T W E E T @ M O R T G A G E G I R L C A

6. What’s in a Mortgage Payment
As some lenders offer the option of paying your property taxes with your
mortgage, your mortgage payment could also potentially include a
property tax portion.
The lender will collect from you with every payment though that tax
amount will be placed in a separate account until your property taxes are
due for the year. This amount is based on your annual property tax
assessment and is charged in addition to your principal and interest
mortgage payment.
J A C K I E W O O D W A R D / / M O R T G A G E B R O K E R / / T M G
7 8 0 . 4 3 3 . 8 4 1 2 / / I N F O @ M O R T G A G E G I R L . C A
T W E E T @ M O R T G A G E G I R L C A

7. MOST MORTGAGES DEFAULT TO
MONTHLY PAYMENTS, THOUGH THERE
ARE ACTUALLY A FEW WAYS YOU CAN
REPAY YOUR MORTGAGE;
Payment Frequency
What’s in a Mortgage Payment

8. MONTHLY: DUE ONCE PER MONTH,
USUALLY DEFAULTS TO THE 1ST OF THE
MONTH.
SOME LENDERS WILL ALLOW YOU TO
SPECIFY A DIFFERENT DAY OF THE MONTH
FOR YOUR PAYMENT TO COME OUT ONCE
EACH MONTH.
Payment Frequency
What’s in a Mortgage Payment

9. SEMI-MONTHLY: DUE ON THE 1ST &
15TH OF EVERY MONTH.
NOT ALL LENDERS OFFER THIS OPTION SO
DOUBLE CHECK IN ORDER TO CONFIRM
IT’S AVAILABLE TO YOU.
Payment Frequency
What’s in a Mortgage Payment

10. BI-WEEKLY: DUE EVERY 14 DAYS, OR 26 TIMES PER
YEAR.
IF YOU CHOOSE THIS PAYMENT FREQUENCY YOUR FIRST
PAYMENT DATE WILL LIKELY DEFAULT TO 14 DAYS AFTER
YOUR MORTGAGE HAS CLOSED. IF YOU HAVE A DIFFERENT
DATE IN MIND TO CORRESPOND WITH YOUR PAY PERIODS,
ADVISE YOUR MORTGAGE PROFESSIONAL.
WITH THIS OPTION, YOU CAN ALSO CHOOSE BETWEEN
REGULAR OR ACCELERATED PAYMENTS. ACCELERATED
PAYMENTS ARE HIGHER AND DIRECTS A LARGER PORTION
TOWARDS YOUR PRINCIPAL THEREBY PAYING DOWN YOUR
MORTGAGE FASTER. LET THE LENDER KNOW WHICH ONE
YOU WOULD LIKE.
Payment Frequency
What’s in a Mortgage Payment

11. WEEKLY: IS ONCE A WEEK, USUALLY A
SPECIFIC DAY EVERY WEEK, LIKE EVERY
FRIDAY.
THIS FREQUENCY IS USUALLY ALSO AVAILABLE
IN REGULAR OR ACCELERATED OPTIONS TOO.
Payment Frequency
What’s in a Mortgage Payment

12. IF YOU’RE THINKING OF ANY OTHER PAYMENT
FREQUENCY THAN MONTHLY, INQUIRE ABOUT
WHAT DAY YOUR “INTEREST ADJUSTMENT
DATE” IS GOING TO BE AS IT COULD RESULT IN
AN ADDITIONAL ONE TIME OUT OF POCKET
CLOSING COST TO YOU.
Payment Frequency
What’s in a Mortgage Payment

13. What’s in a Mortgage Payment
Mortgage Pre-Payments
You can put your mortgage payment to work for you by utilizing your
pre-payment privileges to reduce your mortgage principal faster.
The easiest way is to go with bi-weekly accelerated payments, though if
you really want to ramp up the repayment, take a look at the 2 most
common solutions below:
J A C K I E W O O D W A R D / / M O R T G A G E B R O K E R / / T M G
7 8 0 . 4 3 3 . 8 4 1 2 / / I N F O @ M O R T G A G E G I R L . C A
T W E E T @ M O R T G A G E G I R L C A

14. What’s in a Mortgage Payment
Increase your payment amount
Most lenders allow you to increase your mortgage payment amount by
15-20% each year with no penalty due. Any amount above your minimum
payment goes directly towards your mortgage principal which will reduce it
quicker, resulting in less interest charged over the life of your mortgage.
Your mortgage commitment will detail the pre-payment privileges
your lender offers and once you increase your mortgage payment, you can
usually go back down to the minimum amount for any reason with a call to
your lenders customer service center or visiting your home branch.
J A C K I E W O O D W A R D / / M O R T G A G E B R O K E R / / T M G
7 8 0 . 4 3 3 . 8 4 1 2 / / I N F O @ M O R T G A G E G I R L . C A
T W E E T @ M O R T G A G E G I R L C A

15. What’s in a Mortgage Payment
Lump sum payments
If you don’t want to commit to a payment increase, then lump
sum payments are for you when you have extra cash.
Most lenders allow up to 15-20% lump sum payment
throughout each year. Depending on the lender, that’s
15-20% of your original mortgage amount or last renewed
balance.
J A C K I E W O O D W A R D / / M O R T G A G E B R O K E R / / T M G
7 8 0 . 4 3 3 . 8 4 1 2 / / I N F O @ M O R T G A G E G I R L . C A
T W E E T @ M O R T G A G E G I R L C A

16. What’s in a
Mortgage
Payment
Your mortgage payment is more than
just a way to repay your mortgage as it
can also be one the biggest budget
busters you have! Understanding how
you can use it to your advantage is the
key between those two.
Once the mortgage qualifying is done,
take the time to design a mortgage
payment plan that is both affordable
and puts you in a favorable financial
position. Include your financial planner
in the discussion to ensure you’re
getting a well-rounded approach.

17. JACKIE WOODWARD
MORTGAGE BROKER // TMG
PHONE: 780.433.8412
EMAIL: INFO@MORTGAGEGIRL.CA
VISIT: WWW.MORTGAGEGIRL.CA
Do you have mortgage questions?
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