Mortgage Amortization:
Where Your Money Actually Goes

Interest is calculated on the outstanding principal balance. At the start of your loan, the balance is highest — so interest is highest. As you pay down principal, the interest portion shrinks. This isn't a bank trick — it's math. With a 6.5% rate on $300,000, the first month's interest is $300,000 × (0.065 ÷ 12) = $1,625. After 15 years when your balance is ~$213,000, monthly interest drops to ~$1,160. The payment stays the same ($1,896), so more goes to principal. This is why refinancing mid-loan resets the clock — you go back to paying mostly interest.

A mortgage recast (re-amortization) is when you make a large lump-sum principal payment and the lender recalculates your monthly payment based on the new lower balance — but keeps your original interest rate and term. Example: $300,000 loan at 6.5%. You pay $50,000 toward principal. The lender re-amortizes the remaining $250,000 over the original remaining term. Your new payment drops to ~$1,580/month (from $1,896). Recast fee: typically $250-$500. Key differences from refinancing: no credit check, no appraisal, no closing costs, same rate, same term. Recast is ideal when you have a large lump sum (inheritance, bonus) and want lower payments without resetting your rate or term.

Yes — but be careful how you do it. Making half your monthly payment every 2 weeks results in 26 half-payments = 13 full monthly payments per year instead of 12. On a $300,000 loan at 6.5%, this pays off the loan in ~24 years instead of 30 and saves ~$46,000 in interest. HOWEVER: do NOT sign up for a third-party biweekly service that charges $300-$500 in setup fees plus monthly fees. Instead: (1) Simply divide your monthly payment by 12 and add that amount to each monthly payment (same effect, no fees). (2) Check if your lender offers a free biweekly program. (3) Make one extra full payment per year designated "for principal only." Never pay for a biweekly service you can replicate yourself for free.