Understand the rule of amortisation
Property ObserverDecember 7, 2020
This is the process of paying off your principal once the interest part of the loan has been paid.
Earlier on in the loan term, the majority goes to paying down the interest with just a small part chipping away at your principal.
Obviously, the longer you are paying off the loan for, the more principal that gets paid off.
If your property drops in value, this will alter the equation.
This article is from Property Observer's free ebook Mastering the Art of Refinancing: 12 tips for success and key things to consider.