Mortgage payments are made up of two components:
- the principal amount (the amount borrowed)
- the interest amount (the amount charged to the buyer for borrowing the money).
Mortgage lenders typically offer various payment period options such as monthly, bi-weekly, or weekly. Most mortgages are for an amount that does not go over 75% of the appraised value of the property or the purchase price, whichever is lower.
A minimum of 25% of the purchase price is required for the down payment. However, with a high-ratio mortgage you may pay less than 25% of the cost of the home as a down payment.