Why is my mortgage payment mostly interest in the early years, and how does amortization work?

A fixed mortgage uses an amortization schedule that keeps your total monthly payment constant while shifting the split between interest and principal over time. Early on, your balance is large, so most of each payment covers interest, with only a small slice reducing principal. As the balance shrinks, less interest accrues and more of each payment attacks principal, accelerating equity growth in the later years. This is why extra principal payments early in the loan are so powerful: they cut the balance before years of interest can pile up. Ask your servicer for a full amortization schedule so you can see exactly how each payment is split. Understanding this helps you decide whether prepaying or investing the difference makes more sense for you.