Paying off loans.. is confusingg?

OK, I’m stupid at money, and I realize the banks have this warped system of how interest is applied to a loan. It seems all the interest is paid in the beginning of the loan, then by the time you have enough money to pay off the loan, there is no reason to since you are then only paying principal.

OK so my question is, how is this legal? It seems totally fucked. The real reason I’m asking for help is, I have 2 loans: a school loan and a house mortgage. The school loan is 7.0% interest, and the house is only 5.25%. BUTTT… the school loan is halfway paid, and the mortgage is new, so I’m paying a much larger proportion of interest on the house payment.

So, I have extra money now, which do I pay toward first?

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