Over the life of a mortgage, the payment to principal ________ and the portion to interest expense ________.
A) increases; increases
B) decreases; increases
C) increases; decreases
D) decreases; decreases

Question

Quizplus · Accepted Answer

Over the life of a mortgage, the portion of each payment that goes towards the principal increases, while the portion that goes towards interest decreases. This is because as the principal balance decreases over time, the interest calculated on the reducing balance also decreases, allowing more of the payment to be applied to the principal.

Over the Life of a Mortgage, the Payment to Principal