What is mortgage interest, and how does it work?

Every time you make a monthly mortgage payment, you’ll put money toward both the mortgage principal (or your loan amount) and the mortgage interest. Mortgage interest is the fee you pay for borrowing from your mortgage lender, similar to interest you’d pay on a personal or student loan. The mortgage interest rate varies depending on the length of your mortgage term, the amount you borrow, and market rates in your area. How mortgage interest works Mortgage interest is the fee for taking out a home loan, ...