A mortgage is a loan that is used to purchase a property. The property itself serves as collateral for the loan. Mortgages typically have long repayment terms, usually 15 to 30 years, and are paid back in monthly installments that include both principal and interest.

Several factors affect your mortgage payment, including the loan amount, interest rate, loan term, property taxes, and insurance. A larger loan amount or higher interest rate will result in higher monthly payments, while a longer loan term will generally lower your monthly payment but increase the total interest paid over time.

An amortization schedule is a table that shows each periodic payment on a mortgage over time. It breaks down each payment into the amount that goes toward the principal (reducing the loan balance) and the amount that goes toward interest. Early in the loan term, most of the payment goes toward interest, while later payments are mostly principal.

A fixed-rate mortgage has an interest rate that remains constant for the entire term of the loan. This means your monthly principal and interest payment will not change. An adjustable-rate mortgage (ARM) has an interest rate that can change periodically, usually after an initial fixed-rate period. This means your monthly payment can increase or decrease over time based on market conditions.

The ideal down payment amount depends on your financial situation and goals. A down payment of 20% or more can help you avoid private mortgage insurance (PMI) and may result in a lower interest rate. However, many lenders offer loans with smaller down payments, such as 3% to 5%, which can make homeownership more accessible for first-time buyers.