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Mortgage Glossary

Mortgage Payments

A mortgage payment is the payment amount, usually comprised of principal and interest payments, agreed upon as per mortgage approval documents, which a borrower makes to the lender as repayment for the mortgage.

A mortgage payment is calculated based on the interest rate, compounded annually or monthly, as well as the amortization period. Interest rate of a mortgage and amortization period, will determine the amount of interest that is applied to the interest portion, and the amount of principal payment that is applied to the principal portion of the mortgage payment.

A mortgage payment can sometimes be based on interest only payments, in cases where a borrower has a home equity line of credit or a private mortgage or second mortgage.

It is the responsibility of the borrower to make their mortgage payment on time to their lender, to avoid being in default o their mortgage and avoiding a power of sale of their property. A mortgage payment is usually made via direct withdrawal via void cheque, post-dated cheques or pre-authorized debit form given to a lender by a borrower.