That sounds fine . <| sep |> Noodlers Konrad and a pilot metropolitan . <| sep |> I think he said he ' s going to post it it ' s just not ready yetThis was only his first thoughts he needs to recalibrate heroes <| sep |> Ok so with a mortgage you are paying down the principle , but also the interest . For the first few years you are primarily paying the interest because your loan is so large , but the idea is that every year you pay a little more than the interest repayment alone . Say you start with a $ 500 k mortgage at 4 % over 25 years . This would give you a monthly repayment of $ 2 , 640 . Now you look at this as a $ 500 k mortgage , but the bank is assuming you make no additional payments over 25 years which means when you include interest are looking at paying around $ 791 k in total . Now in your first year you pay $ 19 , 780 in interest and make around $ 12 , 000 in principle payments . This means your mortgage is now $ 488 k . The amount of interest you need to pay per year has reduced a bit . Let ' s give this ten years assuming you get no bonuses , windfalls , payrises or promotions and continue to pay the same monthly payment . You now pay $ 13 , 950 per year in interest . That ' s roughly $ 6 k less than you were paying in interest in year one , and all goes to paying down the principle . You owe roughly $ 356 k in principle so according to our property gurus you now have $ 150 k in equity those sweet capital gains time to buy more houses ! When I said the rent is finally paying down the house I meant you ' ve past the point where the $ 1000 you are making from rent is chipping away at the principle . There ' s a good calculator that can show you here you want to be looking at the amortization scheduletools # repaymentcalculator