• For each mortgage payment you make, the money is first used to pay the interest on your mortgage loan. The rest of your payment is then used to reduce the principal, which is the amount that you borrowed from the lender.

• At first, most of your payments go towards the interest. In the first years of the mortgage, the principal, or the amount that you owe, may decrease by only a small amount. As the mortgage balance decreases over time, more of your payment is used to pay off the principal.
  
  Did you know? During a 25-year mortgage, depending on the interest rates charged on your mortgage, the total amount of your payments could be double the amount that you originally borrowed, or even more.

• The key to saving money is to pay off the principal as fast as possible. If your household budget allows you to make larger payments, you can reduce the time needed to pay your mortgage in full. This could save you thousands, or even tens of thousands of dollars in interest charges.

You can learn more about some payment options that will help you pay off your mortgage faster in the other sections.

If you want to do some calculations and see principal vs interest split over the time, here is a calculator for that.