The Constant Annual Percent, also known as the Mortgage Constant, is the ratio of the annual debt service (which includes both principal and interest payments) to the original loan amount.
A Direct Reduction Mortgage is a type of fixed-rate mortgage where both interest and principal are repaid with each payment, ensuring that the loan is fully amortized over its term.
Principal and Interest Payment (P&I) refers to a periodic payment, usually made monthly, that includes the interest charges for the period plus an amount applied to the amortization of the principal balance, commonly seen with amortizing loans.
