Equal Installment vs Equal Principal

Equal installment — same every month

Principal plus interest, split evenly. Early payments are mostly interest; principal grows later.

Budgeting is easy. Most mortgages work this way.

Equal principal — same principal

The same principal each month plus interest on the remainder. Starts high, shrinks over time.

Total interest is lower. Choose it if you can handle the early burden.

Refinancing rule of thumb

Consider refinancing when the rate drops 0.5pp+ with 3+ years left.

Subtract fees and taxes first. Short remaining terms eat the savings.