E-mailMortgage Payments
- Use our home mortgage calculator to estimate your monthly mortgage payments.
- The longer your repayment period the more interest you pay. If you can afford higher monthly payments, get a mortgage with a shorter repayment period.
Calculate Your Monthly Mortgage Payments
Use a mortgage calculator to estimate your monthly mortgage payments.
Part of your monthly mortgage payments go toward principal and part go toward interest. In the first months of your mortgage about two thirds (2/3) of payments go toward interest, and only one third (1/3) toward principal. With each mortgage payment, you pay less interest and more principal.
The table below demonstrates mortgage payments in action. Notice how interest payments are very HIGH in the first 3 months, but are very LOW in the last 3 months. Interest payments decline, while principal payments rise.
First 3 Months of Mortgage Payments (amortization):
Example of payments for a $200,000 home mortgage at a 6.5 % interest rate for 25 years (300 months).
| Month | Monthly Mortgage Payment | Mortgage Balance | Monthly Principal Payment | Monthly Interest Payment | Total Principal Paid | Total Interest Paid |
|---|---|---|---|---|---|---|
| 1 | $1,339.65 | $200,000.00 | $270.70 | $1,068.95 | $270.70 | $1,068.95 |
| 2 | $1,339.65 | $199,729.30 | $272.15 | $1,067.50 | $542.85 | $2,136.45 |
| 3 | $1,339.65 | $199,457.15 | $273.60 | $1,066.05 | $816.45 | $3,202.50 |
Last 3 Months of Mortgage Payments (amortization):
| Month | Monthly Mortgage Payment | Mortgage Balance | Monthly Principal Payment | Monthly Interest Payment | Total Principal Paid | Total Interest Paid |
|---|---|---|---|---|---|---|
| 298 | $1,339.65 | $3,976.36 | $1,318.39 | $21.25 | $197,342.03 | $201,872.94 |
| 299 | $1,339.65 | $2,657.97 | $1,325.44 | $14.21 | $198,667.47 | $201,887.15 |
| 300 | $1,339.65 | $1,332.53 | $1,332.53 | $7.12 | $200,000.00 | $201,894.27 |
Notice how "Monthly Principal Payment" and "Monthly Interest Payment" columns changed from the first 3 months to the last months of the mortgage.
Length of Your Mortgage and Mortgage Payments
- The longer your mortgage term, the more interest you pay.
- The shorter your mortgage term, the less interest you pay.
If you can afford larger monthly mortgage payments, get a mortgage with shorter repayment period, because you will save tens of thousands of dollars in the long run.
A 20-year mortgage with a difference of $140 in monthly mortgage payments can save $46,454.07 in interest payments in comparison to 25-year mortgage at the same interest rate.
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Let me do my own calculations using the mortgage payment calculator.
Extra Mortgage Payments
If you get an open mortgage, you can add additional payments any time. Open mortgages have higher interest rates than closed mortgages.
With an open mortgage you’re free to make additional payments every month or pay off the mortgage in full whenever convenient.
If you get a closed mortgage, you will not be able to make extra payments. Closed home mortgages have lower interest rates then open mortgages.
Falling Behind on Mortgage Payments
Avoid falling behind on mortgage payments at all costs. Under a home loan contract, you are not allowed to skip a single payment.
Missing One Mortgage Payment
One skipped payment makes you “delinquent.” Once you are delinquent, your most recent payment is applied toward the latest missed obligation. For example, if you skipped a July payment but paid in August, the payment from August will go towards July. When you make another payment in September, it will go towards August. Payment in October will go towards September and so on, until you pay off the missed month.
A missed payment goes on your credit score – so if you miss a payment, pay it back as soon as possible.
Expect lenders to constantly remind you of missed payment in letters and/or by calling your home or work. Lenders may also charge a penalty, but it depends on your contract.
Missing Two or More Mortgage Payments
Once you miss two or more payments, the lender has a right to possess your property through “foreclosure” or through “power of sale.” Foreclosure is the legal process by which a lender obtains a termination of a mortgage either by a court order or by the operation of existing statutory law. Power of sale is the right of the lender to force the sale of a property without judicial proceedings, should default occur.
Both are BAD options. Essentially, the lender will take your home and sell it.
What to do and your options
When you miss two (2) or more mortgage payments, contact your mortgage lender and discuss your options. Lenders usually offer programs as long as you cooperate. Some of the options may include:
- Reinstatement – pay entire missed amount, plus penalties, by a date you and the lender agree on.
- Repayment plan – lender gives you time to repay missed money by adding portion of monthly payments to the past-due balance.
- Forbearance – lender reduces or stops payments for an agreed period of time. By end of that period, regular payments must resume and you are required to pay back the full amount owed. Forbearance does not help you if you can’t afford the home you live in.
- Loan modification – changes in the mortgage plan such as a lower interest rate or longer mortgage term.
Before you ask the lender for “loan modification” or “forbearance,” show genuine effort and initiative. Lower your bills, sell your car, get rid of other payments and present appropriate documents as proof. The lender is likely to agree if you do. - Sell your home – if you can’t pay for a mortgage, sell your home before the lender takes it from you.
- Bankruptcy – this is the last resort! Bankruptcy clears all debts, but leaves a horrible print on your credit score for 7 years, during which time you will be denied any form or credit.
How NOT to fall behind on your Home Loan Payments
Before you get a mortgage, calculate if you can afford it – along with other expenses such as a car, food and credit cards (if you have any). Use the mortgage payment calculator to estimate your monthly payments and review mortgage closing costs.
Ask one of our experts if you have more questions.
What to Avoid
There are a number of variable mortgages (not all) that offer very low interest rates as an introduction for the first 1 to 2 years. Introductory rates are usually between 2% and 4% and are very attractive in comparison to other rates. Once the introductory rate period expires (usually 1 – 2 years), a higher, regular mortgage rate kicks in. Be aware that introductory rates do not last long, so calculate your budget using real rates (to avoid nasty surprises).
Monitor daily interest-rate updates to keep up-to-date on real rates offered by lenders. You can even sign up by email for updates.
Does it Matter Who Makes Mortgage Payments?
Lenders only care about payments from “official” borrowers who signed the contract. If for some reason you can’t make mortgage payments and your parents/friends are helping you out, make sure payments come in your name. If payments come in someone else’s name, the lender will contact you and start investigating.
