Nearly all of Sutton’s re re re payments choose to go to protect interest, insurance costs as well as other costs, perhaps maybe not toward the main. So when she renewed her loan a second time, it absolutely was no various.
The consequence is comparable to exactly just exactly how home financing amortizes: The percentage of each re re re payment that goes toward interest has reached its greatest the very first thirty days and decreases with each re re payment. While the principal is paid down, less interest is owed every month. The payments go almost entirely toward paying down the principal by the end of the loan.