When deciding on your repayment schedule you should always remember the longer you take to payback the principal the higher your total interest payment will be.

"Equal" Payments: Probably the most common schedule, this type of mortgage requires you to pay the same amount each period (monthly or quarterly) for a specified number of periods. Part of each payment covers the interest and the rest reduces the principal.

"Equal" Payment and a Final Balloon Payment: This type of mortgage requires you to make equal monthly payments of principal and interest for a relatively short period of time. After you make the last instalment payment, you must pay the balance in one payment, called a balloon payment. Some lenders will give you the option to refinance the mortgage to help you stretch out the final balloon payment. This type of mortgage offers definite benefits to you. Because of the lower monthly payments during the course of the mortgage, you can keep more cash available for other needs. Of course, when you are thinking about those nice low payments, don't forget the big balloon payment waiting around the corner.

Interest-Only Payments and a Final Balloon Payment: With this type of mortgage, your regular payments cover only interest. The principal stays the same. At the end of the mortgage term, you must make a balloon payment to cover the entire principal and any remaining interest. The obvious advantage of this arrangement is the low periodic payments. But over the long term, you will pay more interest because you are not reducing the principal sum on which you pay interest.

Endowment Mortgage: This type of mortgage is similar to an interest-only mortgage but the repayment of the principal comes from the proceeds of an endowment. Several types of endowments are eligible for this type of mortgage, they include: life assurance policy, personal or executive pension plan policy, or a personal equity plan. The additional security provided by the endowment usually result in a lower interest rate.