Mortgage Basics

Get confident with the language so you can make the right decisions.

Whether you’re buying your first home or renewing your mortgage loan, the world of mortgages has a number of definitions you may not be familiar with. Here we’ll help you understand the language so you’re able to make the right decisions.

What is a mortgage?

A mortgage is a loan secured by real estate/property that you pay off over time. You’ll be paying back the money you borrowed plus interest and eventually you’ll be mortgage-free.

Down Payment

A down payment is the amount of money you put towards the price of a home. Whatever you don’t put down is the amount you are borrowing.

If you’re putting down 20% or more, that’s a Conventional Mortgage.

If you’re putting down less than 20%, that’s a High Ratio Mortgage.

Amortization Period vs Term

The amortization period is the total number of years it takes to pay off your mortgage loan completely. You choose the number of years when you apply for a mortgage loan. Most first-time buyers typically pick the longest amortization period available. If your down payment is less than 20%, your maximum amortization period is 25 years. If your down payment is greater than 20%, you could have an amortization period of up to 30 years.

How does it work? The longer the amortization period, the lower your principal and interest payments will be, but overall, the amount of interest you’ll pay will be higher. With a shorter amortization period, you’ll make higher principal and interest payments, but you will pay less interest in the end.

A mortgage term is the length of time you’re committed to a mortgage rate, lender, and associated conditions.

Payment Frequencies


Enjoy the flexibility of choosing how often to pay. You get to determine your payment schedule, from Weekly, Rapid Weekly, Bi-Weekly, Rapid Bi-Weekly, Semi-Monthly, Rapid Semi-Monthly, or Monthly.

You could link up your principal and interest payments for your mortgage loan with your pay, or opt to pay monthly or twice a month. Paying every other week might seem the same as paying twice a month, but you’ll actually be making two extra principal and interest payments a year with a biweekly payment schedule.