The mortgage payments for most home loans are set as a “table mortgage”. This is set so the repayment tries to stay the same and the home loan gets paid off over 30 years usually. Obviously over time interest rates can change so the payment over the long term actually does change.
Now after all that confusion, how about I break it down a bit so that it makes sense.
Lets look at what happens at the start of a 30 year home loan of $500k on a 3.5% rate.
| Total weekly repayment amount | Towards paying it off | Interest |
| $518 | $181 | $337 |
At this stage most of your payments are going towards the interest bill.
Any amount you pay over and above this can go straight towards paying down your home loan
Hamish – slightly above average mortgage broker
About half way through the term this is what it might look like if interest rates didn’t change. (they probably might)
| Total weekly repayment amount | Towards paying it off | Interest |
| $518 | $301 | $217 |
And around the end of the term around the 29th year, the payments look like this.
| Total weekly repayment amount | Towards paying it off | Interest |
| $518 | $496 | $21 |
