Reply To: Great Depression


You can actually see this on the statement the bank sends you every month. It breaks the payment down by principal repaid and interest paid.

When you first start paying, say, a $250,000 loan, interest is accruing on $250,000. When you’ve paid the loan down to just $25,000 left in principal, you are paying interest only on $25,000. The interest amount is therefore much lower, which means that your fixed monthly payment is now disproportionately going to principal repayment.