Mortgage - repayments query?

Hi, I am a mortgage broker in Australia, however I think the basic lending principles should be the same. Typically a home loan is 'amortised' over the term of the loan. This means that calculations are made to allow for both interest and principle repayments each month, and have the loan paid off after say 20, 25 or 30 years. However, the way it works is that early in the loan term you pay a substantial amount of interest and not much at all off the principle. This means that if your interest rate is around 6% then the initial monthly interest charge would be around �625. The difference between this and your full monthly repayment of �800 is the amount that pays down the actual principle amount of the loan. As each month goes by the interest charge gets lower (because the loan is being paid off), and the principle reduction gets greater. Hope that helps.