Amortization
Amortization is the process of paying off a loan through regular, scheduled payments that cover both interest and principal. Early payments are mostly interest, while later payments go mostly toward the principal balance. An amortization schedule shows exactly how each payment is split over the life of the loan.
Example
On a $300,000 mortgage at 6% for 30 years, your first $1,799 monthly payment includes about $1,500 of interest and only $299 of principal.