The bills that start immediately
Property tax may be paid through your lender or directly to the city in instalments. Utilities transfer into your name. Home insurance is required before closing. If you bought a condo, the fees start the day you take possession and often rise at the first budget after you move in.
Build the repair reserve before you need it
A furnace, a water heater, and a roof do not fail on a schedule. Setting aside a fixed monthly amount from month one turns a crisis into an inconvenience. For a freehold house, one percent of value per year is a sound long-run target.
Use your prepayment privileges early
Most mortgages allow a lump sum payment and a payment increase each year without penalty. Prepayments in the first years of the term have the biggest effect because that is when the balance and the interest portion are highest. Even switching to accelerated biweekly payments removes years from the amortization.
- Accelerated biweekly adds one extra monthly payment per year
- Annual lump sums usually allowed up to a set percentage of the original balance
- Payment increases are permanent unless reset at renewal
Keep the paperwork
Statement of adjustments, title insurance policy, warranty documents, permit records, and invoices for improvements. Improvement receipts matter if the property is ever a rental or a second property at sale time.
Frequently asked questions
- When is my first mortgage payment due?
- Usually one payment period after closing, depending on the frequency you chose and the interim interest calculated at closing.
- Should I make prepayments or invest instead?
- Compare your mortgage rate to the after-tax return you expect. High-rate debt is almost always paid first; beyond that it becomes a risk preference.