Demystifying Mortgages: How Amortization Works

The Sticker Shock of Interest

You borrow $300,000 for a house. Over 30 years, you might pay back $600,000. Why? That's the power of compound interest working against you.

What is Amortization?

Amortization is the schedule of your payments. In the beginning, nearly almost all of your monthly check goes to interest, not the principal loan. It takes years before you start effectively chipping away at the debt itself.

Planning Your Budget

Our Loan Calculator shows you the breakdown:

• Monthly Payment: Your fixed commitment.
• Total Interest: The true cost of the loan.
• Payoff Date: When you will finally be debt-free.

Scenario: Changing your term from 30 years to 15 years increases your monthly payment but can save you tens of thousands in interest. Use the calculator to model these scenarios.

Know what you owe. Plan your future with the Loan Calculator.