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A mortgage payment is the amount of money you pay towards your mortgage — typically on a biweekly or monthly basis. Mortgage payments are made up of mortgage principal and interest.

The principal is the amount you borrow (mortgage amount). For example, if you have a $500,000 mortgage, the principal is $500,000. The lender charges interest on your principal, adding to the amount you owe.

When you start paying your mortgage, a larger portion of your payment goes towards interest. As you pay down your mortgage, the interest portion decreases so more of your payment goes towards paying off your principal.

The mortgage amortization period is the actual number of years (mortgage length) it will take to repay a mortgage loan in full, based on the interest rate for your current mortgage term.

This may go beyond the term of the mortgage contract. The mortgage term refers to the period of time over which the interest rate, payment, and other mortgage conditions are set.

For example, mortgage agreements often have 5-year terms but 25-year amortization periods. At the end of the term, the mortgage is up for renewal, and you may choose to renew your mortgage or pay it out completely without any prepayment charge.

To buy a home in Canada, the minimum down payment varies depending on the cost of the home.

Homes that are:

• $500,000 or less require a 5% down payment
• Between $500,000 to $999,999 require a 5% payment on the first $500,000 and 10% on the portion that’s over $500,000
• Over $1 million require at least a 20% down payment: the down payment depends on a number of factors, including the price of the property, where the home is located, the property type, and your credit score

Learn more about saving for a down payment here.

A fixed rate mortgage lets you take advantage of a set interest rate and payment throughout your term. This can offer peace of mind when the prime rate increases, since your mortgage payments won’t change.

A variable rate mortgage is a loan where the interest rate is periodically adjusted based on the prime rate.

Learn more about fixed mortgage rates and variable mortgage rates.

With a shorter mortgage amortization period, you’ll pay off your mortgage faster, but your mortgage payments will likely be higher. Also, with a shorter mortgage amortization period at the same interest rate, you may pay less interest over the length of your mortgage.

Your Scotiabank home financing advisor can give you advice on how to buy your first home, invest in an income property, or leverage your home equity for a big expense.

Use our advisor locator tool to find an advisor. To learn more about home financing, check out Scotia’s Advice+ mortgage hub.

There are several programs available in Canada that help make home ownership more affordable, including:

• The Home Buyers' Plan (HBP): The HBP lets first-time home buyers withdraw up to $35,000 from their Registered Retirement Savings Plan (RRSP) to use towards the purchase of a home
• The GST/HST new housing rebate: This program provides a rebate on a part of the GST or HST paid on a new or substantially renovated home