Why does it take 30 years to pay off $150,000 loan, even though you pay $1000 a month?

The principal alone would take 150 months to repay at $1,000 per month: $150,000 ÷ $1,000 = 150 months, or 12.5 years. But a mortgage payment also covers interest, which is charged on the amount still owed, so less than $1,000 goes toward principal in many months. Over a 30-year loan, much of the total paid is interest, making choice d, “The rest of the loan is paid out in interest,” the best answer.

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