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Interest Only Mortgage The interest only mortgage is straightforward. The borrower takes out a lump sum of money and only repays the interest due each payment period. This means that, throughout the life of the mortgage, the borrower will always owe the same amount of principal.
The Financial Components of a Mortgage The basic premise behind every mortgage is the borrower’s promise to repay the amount borrowed. There are several components to a mortgage, as is illustrated in the Standard Charge Terms, but at its core a mortgage payment is made up of the following financial components: