In this issue...
Why your Amortization Schedule isn't just another mortgage document to file away.
Often, when people buy their first home they also find that there's a lot of paperwork - to sign and to file. Along with all the legal documents, your financial institution may also send you an amortization schedule.
At its most basic, you'll see that it provides a schedule showing how much of your mortgage is paid down with every payment you make. It will also tell you how long it will take to pay off your mortgage if all you did was make your scheduled payments.
The first thing you'll notice is that when you've just started your mortgage, the majority of each mortgage payment is interest. On a 25 year amortized mortgage, it's not until you have made nearly 10 years of payments that the majority of each payment begins to go toward your principal.
Before you file the schedule away, you might want to use it to help you figure out how to pay off your mortgage sooner and save on the interest you pay. Did you know that any extra dollars you add over and above your scheduled payment amount goes entirely toward your principal. The same holds true for any increase you make to your payments.
To see an approximate amortization schedule on your own mortgage, try our Mortgage Payment Calculator. Enter your info, and then click "Calculate". You'll then see the amortization details. To see the impact of making extra mortgage payments, simply select "See how much more you can save" and follow the prompts.
You'll see how you can shave years off your mortgage and save amazing amounts in total interest paid. Now that's a great feeling.
® "unmortgage" is a registered trademark of ING Bank of Canada
* Interest is calculated semi-annually, not in advance. Assumes no change in rate and no fees apply. "Big Banks" refers to Bank of Montreal, CIBC, TD Canada Trust, RBC Royal Bank and Scotiabank.
