See your monthly payment and total interest before you sign anything.
Covers principal and interest only. Property tax, homeowners insurance, PMI, and HOA fees are not included.
| Year | Payment | Principal | Interest | Remaining balance |
|---|
A mortgage amortizes through fixed monthly payments split between interest and principal, and that split changes every month even though the payment itself does not move.
On a $300,000 mortgage at 6%, the first payment charges interest on the full $300,000 before a single dollar of principal comes off. Ten years into a 30-year term, the balance has barely moved compared to how fast it drops in the final decade, because interest recalculates each month against whatever is still owed. The shift from interest-heavy to principal-heavy is gradual, with no fixed point where it switches over.
No. This is principal and interest only. Property tax, homeowners insurance, any escrow or impound account, mortgage insurance, and lender fees are all left out, and for most homeowners those add up to a real share of what actually leaves the account every month.
A mortgage (also called a home loan) uses amortization to pay itself off: fixed periodic payments where each one covers both interest owed and a portion of the principal balance. Even though the total payment stays the same every month, the split between interest and principal changes over the life of the loan.
Early payments are mostly interest because interest is calculated on the remaining balance, and early on that balance is at its highest. As principal gets paid down, the interest portion shrinks and more of each fixed payment goes toward principal, which is why a 30-year mortgage can feel like it's barely reducing the balance in its first few years.
The fixed payment formula is: payment = P × [r(1+r)ⁿ] / [(1+r)ⁿ − 1], where P is the loan principal, r is the monthly interest rate, and n is the total number of payments. This guarantees the loan balance reaches exactly zero after the final payment, with interest and principal splitting differently every month along the way.