A mortgage is a loan used to purchase property or land. The property serves as collateral, and if you fail to make payments, the lender can take it back through foreclosure.

A regular mortgage payment consists of two parts: principal (the borrowed amount) and interest (the lender’s charge for loaning the money). Payments gradually reduce the principal over time.

Term: The period during which you commit to the mortgage rate, lender, and terms.
Maturity Date: When the mortgage loan is expected to be fully paid off.

Some lenders allow early repayment, but consult with your lender about potential penalties. Early repayment affects their planned interest earnings.

Higher credit scores often lead to more favorable mortgage terms, including lower interest rates. Lenders use your credit score to assess your creditworthiness.

If you default on payments, the lender can take back the property. Foreclosure is the process of reclaiming the collateral.

Common types include fixed-rate, variable-rate, and open mortgages. Each has different features and benefits.

Higher interest rates mean larger payments, while lower rates reduce your monthly costs. Consider the impact when choosing a mortgage.

Mortgage insurance protects the lender in case of default. It’s required for high-ratio mortgages (with less than 20% down payment).

Use online calculators like ours to estimate your monthly payments based on loan amount, interest rate, and amortization period.