[jorian]

Caveat: I am a mortgage broker working in Vancouver, BC

With all due respect to those posting here:

The Wells Fargo guy is full of it. The moment your payment lands in their account, it starts to accrue interest. The mortgage documents must disclose the terms of the contract and should include a section on priveleges (making extra payments - early payout etc). Maybe you aren't allowed to make extraordinary payments. Maybe the mortgage is securitized (sold after funding)

Most mortgage payments are calculated semi-annually and not in advance. This means it compounds twice per year and is due at the end of the month rather than the beginning.

Also if you choose a 15 year amortization, you are locked into paying that higher amount. Not a good thing if you suffer a financial setback. Set up the mortgage on a 25 year amortization but schedule your payment size to mimick that of a 15 year amortization. If, at some future date, you need a lower payment you can fall back to the contracted minimum payment. With many institutions this also creates a possible "payment holiday" where any payment over the contractual minimum counts towards future payments. KInd of nice if you want to skip a payment around the Christmas holidays or if things tighten financially for you.