I am Liam. Buying a home is the biggest dream for most Canadians, but it is also likely the biggest financial commitment you will ever make. To achieve this dream, most people need a mortgage. Now, a mortgage is really just a very large loan, but because the numbers are so big and the time frame is so long, the math works differently than a small car loan or a credit card. Today, we are going to look at the secret map of home ownership. It is called the amortization table. I love coming up with big ideas, and there is no idea bigger than owning your own piece of land. But to do it right, you have to understand exactly where your money is going every month. You are not just buying a house; you are managing a twenty-five-year financial project.I am Chloe. I love finding out facts, and the fact is that your mortgage payment is split into two very different parts. One part goes to the bank as interest, and the other part goes toward actually owning your home, which we call the principal. I am going to show you how to generate a mortgage amortization table using a spreadsheet. When you see the numbers laid out month by month, it can be quite a shock. You will see exactly how much of your hard-earned money is being used to pay the bank for the privilege of borrowing. Understanding this table is a key principle of sound financial planning because it reveals the true cost of your home. It is the only way to see the long-term reality behind the monthly payment.I am Maya. I am a great planner, and my job is to help you look at the total cost over the life of the mortgage. When you look at a four-hundred-thousand-dollar mortgage at a five percent interest rate over twenty-five years, the math might surprise you. By the time you make your final payment, you will have paid the bank almost as much in interest as the house originally cost! We are going to compare the total interest paid to the original principal. This investigation is vital because even a tiny change in the interest rate can mean a difference of fifty thousand dollars or more over the years. You need to be a manager of your wealth, and that starts with knowing the total price tag of your debt.And I am Noah. I love telling stories, and I want your mortgage story to be one of victory and freedom. I am going to show you how to hack your mortgage using the power of frequency. By changing your payment periods from monthly to bi-weekly, you can save tens of thousands of dollars and become debt-free years sooner. We will use technology and the T-V-M Solver to investigate how varying your payments can drastically reduce the length of time you are in debt. Let us look at the table and see how you can take control of your largest liability. It is about working smarter, not just harder, to own your home.Let us look at what an amortization table actually tells us. Imagine you have a five-hundred-thousand-dollar mortgage. In the very first month, your interest is calculated on that full five hundred thousand. Because the balance is so high, the interest is a huge number. Even though you might pay three thousand dollars that month, maybe twenty-one hundred of it is just interest! Only nine hundred dollars goes toward the principal. As you pay down the principal, the balance gets smaller. The next month, the bank calculates interest on a slightly smaller balance, so the interest is a few cents lower, and the principal portion is a few cents higher. This happens every single month for twenty-five years. By the time you get to the last year of your mortgage, almost your entire payment goes toward the principal. Using a spreadsheet to generate this table allows you to see the exact moment you own more of the house than the bank does. It is a powerful motivator for any homeowner.Now let us look at the shocking reality of the total cost. If you borrow four hundred thousand dollars at five percent for twenty-five years, your monthly payment is about twenty-three hundred dollars. If you multiply that by twelve months and then by twenty-five years, you will see that you have paid back nearly seven hundred thousand dollars in total! That means three hundred thousand dollars of your money went straight to the bank as interest. This is why shopping for the best interest rate is a sound financial principle. If you could find a rate that is just one percent lower, you could save over sixty thousand dollars in interest. That is enough money to put a child through university or buy a very nice car. When you compare the total interest to the original principal, you realize that the interest rate is the most important number in your financial life during those twenty-five years.But you have the power to change the conditions of your mortgage. One of the best tips I can give you is to use accelerated bi-weekly payments. Here is the math. There are twelve months in a year, but there are fifty-two weeks. If you pay bi-weekly, you make twenty-six half-payments. This actually equals thirteen full monthly payments a year instead of twelve. By making that one extra payment every year without even really noticing it, you can shave about four years off a twenty-five-year mortgage! You also save a fortune in interest because you are paying down the principal faster, which means less interest is calculated every single time. Using the T-V-M Solver to investigate these varying payment periods shows you exactly how much time and money you can save. You can also choose a shorter amortization period, like twenty years instead of twenty-five. While your monthly payment will be higher, the total interest you pay will be significantly lower. It is all about prioritizing your long-term freedom.Understanding mortgages is about having a long-term vision for your life. It is about realizing that small choices you make today—like choosing bi-weekly payments or rounding up your monthly check—can lead to massive freedom decades from now. By generating your own amortization table, you take the mystery out of home ownership. You are no longer just a borrower; you are a strategic manager of your own wealth. In our next video, we will look at how to adjust your budget when life changes, because a mortgage is a twenty-five-year commitment, and a lot of things can happen in that time! Take a look at the sample amortization table in your lesson and calculate how much interest is paid in just the first year. It will definitely change how you think about the cost of your home. Stay focused, keep tracking, and remember that every dollar you pay toward your principal is a dollar that works for you forever.One last fact for your investigation. In Canada, most mortgages have a term of five years, even though the amortization is twenty-five years. This means every five years, you have to renew your mortgage at the current interest rate. This is a major change in circumstances that you must plan for. If rates go up, your monthly payment will go up, and you will need to adjust your budget. By understanding how the amortization table works now, you will be prepared to make the best decisions when it comes time to renew. You can use technology to simulate what would happen if rates rise by two percent and see how that affects your timeline. Being prepared is the hallmark of a responsible homeowner. We will see you in the next video to talk about pivoting your plan!
