When it comes to paying down a mortgage, your repayment schedule is structured so that in the early years, a greater percentage of each payment covers interest charges and a smaller percentage covers principal repayment. Over time, this changes so that a greater percentage of each payment goes towards paying down the principal, and less towards paying interest.

The more of the principal you pay down, the greater the equity you build up in your home. Basically, equity is the amount of your home that you own. For example, if your home is worth $350,000 and your mortgage is for $300,000, you have $50,000 in equity. So if you’re looking to own your home, you’ll need to know about choosing a mortgage that’s right for you.