Amortization
The process of paying off a loan through regular payments that cover both principal and interest.
In an amortized loan, each payment is split between interest and principal. Early payments are mostly interest; later payments are mostly principal. On a 30-year mortgage, the crossover point where more than half of each payment goes to principal does not arrive until year 18-20. This is why building equity feels painfully slow in the first decade of homeownership.
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