Mortgage Math: How Monthly Payments, Interest and Amortization Really Work
The number that surprises everyone Borrow 1,000,000 at 4.5% over 30 years. The monthly payment is 5,066.85. Multiply it out and you pay back 1,824,067 — of which 824,067 is interest, about 82% of the amount you borrowed. Now the part that really catches people: in the first five years you hand over 304,011, but only 88,421 of it reduces the loan. The other 215,590 is interest. Five years of payments, and the balance has barely moved. ...