Your monthly mortgage payment does not only pay back the loan. A majority of your mortgage payment, especially towards the end of the term, is devoted to the principle (the actual balance of your loan).
However, you have a few other items usually included in your payment.
An interest fee is included for all loan repayments. This is the way banks and financial institutions make money on loaning money.
Taxes (property taxes) are included in monthly loan payments. Property taxes are held in escrow and paid out every year for the home.
Insurance is another fee included with most loans. There are two different types of insurance. One is property insurance which protects the home, items in the home and against injury and accident. The other type of insurance might be PMI (private mortgage insurance), which a lender takes out when a homeowner pays less than 20% of the house price for a down payment.
The fees above are usually referred to as the PITI fees, or principle, interest, taxes and insurance fees.