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how do amortization schedules work and when are they used?
user
simply put, for a mortgage, interest is charged only on the balance as well. think of it this way - on a $100k 6% loan, on day one, 1/2% is $500, and the payment is just under $600, so barely $100 goes to principal. but the last payment of $600 is nearly all principal.  by the way, you are welcome to make extra principal payments along with the payment due each month. an extra $244 in this example, paid each and every month, will drop the term to just 15 years. think about that, 40% higher payment, all attacking the principal, and you cut the term by 1/2 the time.
assistant