How Amortization Works
Mortgage amortization is the process of paying off a debt over time through regular payments. A portion of each payment goes towards interest costs (what your lender charges you), and the rest goes towards the loan balance (principal).
In the beginning, most of your payment goes to interest. Over time, as the balance decreases, more of your payment goes towards the principal. Using this calculator, you can see exactly how extra payments can shorten your loan term and save you thousands in interest.