"Mortgage amortization" is a complex-sounding phrase that describes a simple process: paying off your home with a fixed monthly payment over time. You can make better financial decisions by understanding how amortization and your mortgage work together. What is mortgage amortization? Mortgage amortization refers to paying a mortgage in regular, fixed installments over time. Your lender splits your payment into two parts: one that reduces the mortgage principal — the amount you borrowed — and the other ...

Making one extra mortgage payment a year might not sound like a huge financial move, but the long-term benefits can be significant. The strategy helps you pay off your loan early, increases the speed at which you build home equity, and, most importantly, reduces the amount of interest you pay over the life of your loan. Here’s what to know about this approach and how to make it work for your budget and goals. How mortgage repayment works Most mortgage loans are amortized — meaning the amount you owe (p ...

Mortgage principal is one of the many terms you'll stumble across when getting a loan to buy a home. It is simply the balance you owe from the money you borrowed by taking out a mortgage. However, it's essential to understand how it works and its potential impact on your monthly payment. What is mortgage principal? In any loan, including a mortgage, the principal is the original amount borrowed minus any payments made to the balance. For example, if a home sells for $300,000 and you make a down paymen ...