Amortization
Amortization is the process of paying off a loan with equal payments split between interest and principal. Early payments are mostly interest because the balance is high; as the balance shrinks, more of each payment goes to principal — so you build equity slowly at first, then faster near the end.
The schedule lists every payment and how it splits. On a 30-year mortgage the early years are dominated by interest — you typically repay only about a third of the principal in the first 15 years — because interest is charged on a balance that has barely moved. That front-loading has two consequences worth acting on. Extra principal paid early saves far more than the same amount paid late, since it removes interest from every remaining month. And refinancing into a fresh 30-year term restarts the schedule, putting you back at the interest-heavy end even at a lower rate, which is how a refinance can lower the payment while raising total interest.
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