When you make a mortgage payment, the amount paid is a combination of an interest charge and principal repayment. Over the life of the mortgage, the portions of interest to principal will change.
At first, your payment will be primarily interest, with a small amount of principal included. As the mortgage matures, the principal portion of the payment will increase and the interest portion will decrease. This is due to the interest charge being calculated off the present outstanding balance of the mortgage, which decreases as more principal is repaid. The smaller the mortgage principal, the less interest is charged. (If you have negative amortization and your mortgage is actually growing in debt, see Understanding the Mortgage Payment Structure.)
For example, let's examine a simple mortgage for $100,000 at an interest rate of 4% annually and a time to maturity of 24 years. The yearly mortgage payment is $6,558.68. The first payment will consist of an interest charge of $4,000 ($100,000 x 4%) and a principal repayment of $2558.68 ($6,558.68  $4,000). The outstanding mortgage balance after this payment is $97,441.32 ($100,000  $2,558.68). The next payment is equal to the first, $6558.68, but will now have a different proportion of interest to principal. The interest charge for the second payment equals $3,897.65 ($97,441.32 x 4%), while the principal prepayment is $2,661.03 ($6,558.68  $3,897.65).
The principal portion of the second payment is about $100 larger than the first. This occurs because you've paid money towards the principal amount  lessening it  and the new interest payment is calculated on the lower principal amount. Near the end of the mortgage, the payments will be primarily principal repayments.
To learn how to start paying down your principal more quickly, see Be MortgageFree Faster.

What are the responsibilities of the principal in a company?
Learn to differentiate between some of the many definitions and responsibilities of a "principal" as it relates to business ... Read Answer >> 
I've come into a large amount of money. Should I invest it or pay off my mortgage?
There is no simple answer to this question as it depends on a number of key factors, namely the aspects or criteria of your ... Read Answer >> 
What are the pros and cons of a simpleinterest mortgage?
Learn the difference between a simple interest mortgage and a standard mortgage, along with their relative advantages and ... Read Answer >> 
Why is more interest paid over the life of a loan when it is capitalized?
Learn what it means to capitalize interest on a loan. Understand why more interest is paid over the life of a loan when it ... Read Answer >> 
Is there any time I would want to have a zeroprincipal mortgage?
As a general rule, entering a zero principal mortgage, or what is commonly referred to as an "interestonly mortgage", is ... Read Answer >> 
What are the different types of subprime mortgages?
Clarify your understanding of subprime mortgages. Learn about the different types, how they work and when they might be beneficial. Read Answer >>

Credit & Loans
Understanding The Mortgage Payment Structure
We explain the calculation and payment process as well as the amortization schedule of home loans. 
Credit & Loans
Mortgage Basics: The Amortization Schedule
By Lisa SmithThe amortization schedule for a residential mortgage is a table that provides a breakdown of the schedule of payments from the loan's first required payment to the loan's final payment. ... 
Options & Futures
Be MortgageFree Faster
Getting rid of this debt faster has bigger benefits than you might think. 
Economics
What Does Principal Mean?
For banks, principal refers to the amount due on a loan, and is used to calculate interest payments. 
Home & Auto
Understanding The Mortgage Payment Structure
While a mortgage’s size and term set the baseline, the interest, taxes and insurance all influence the amount of the monthly payment. 
Credit & Loans
Mortgage Basics: Costs
By Lisa SmithPeople generally think about a mortgage in terms of the monthly payment. While that payment represents the amount of money needed each month to cover the debt on the property, the ... 
Credit & Loans
How Interest Rates Work On A Mortgage
A stepbystep explanation of the interest calculations, mortgage types, and how the loan is eventually "retired" – which means paid off. 
Options & Futures
Make A RiskBased Mortgage Decision
Find out how to choose which mortgage style is right for you. 
Credit & Loans
Mortgages: FixedRate Versus AdjustableRate
Both of these have advantages and disadvantages depending on your financial needs and prospects. 
Professionals
MortgageBacked Securities (MBS)
CFA Level 1  MortgageBacked Securities (MBS). Learn the process of creating and collateralizing mortgagebacked securities. Covers their expected cash flows and possible risks.

Interest Due
The portion of a current mortgage payment that is comprised of ... 
Mortgage Accelerator
A type of mortgage loan program popular in the United Kingdom ... 
CMG Plan
A mortgage plan in which a borrower's mortgage is structured ... 
Amortization Schedule
A complete schedule of periodic blended loan payments, showing ... 
Negative Amortization
An increase in the principal balance of a loan caused by making ... 
Servicing Fee
A percentage of each mortgage payment made by a borrower to a ...