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Amortization is the process of paying off a loan through regular payments over time. In the early years, most of your payment goes toward interest. Over time, a larger share goes toward principal as the outstanding balance decreases.

A larger down payment reduces the loan amount, lowers monthly payments, and reduces total interest paid. It may also help you avoid Private Mortgage Insurance (PMI), which lenders require when the down payment is below 20%.

A 15-year mortgage has higher monthly payments but saves significantly on total interest — often 50% or more compared to a 30-year mortgage. A 30-year mortgage has lower monthly payments but costs much more in total interest over the life of the loan.