Question

If you pay off part of your mortgage early, the payment you make goes to the interest. True or False?

1) True
2) False

Answer 1

False. When you pay off part of your mortgage early, the payment you make is applied to both the principal and the interest.

Step-by-step explanation:

False. When you pay off part of your mortgage early, the payment you make is applied to both the principal and the interest. The principal is the amount of money that you borrowed to purchase your home, while the interest is the additional amount that the lender charges for lending you the money. By paying off the principal early, you can reduce the amount of interest you pay over the life of the loan.