I have always felt the way mortgages are amortized seems a bit corrupt in how much one pays back to borrow. Basically a borrower
ends up paying back more than 2 -2.25 times what they borrow (ie: borrow $500k - you will be paying back $1M - $1.1M approx). Since the interest is front loaded, meaning the majority of the interest is paid with-in the first 7 years (approx), most of the monthly payment goes towards interest - more than 75% of the monthly payment, so one doesn’t start paying down the mortgage principal until they get past this 7 yr period, unless they pay an extra amount on top of the required monthly payment and apply it to principal. Seems a little “predatory” for lack of a better word. I’d like to see how this can be restructured to be more of a “win-win” for both the borrower and the lender to make home ownership more affordable. Right now the lenders are making a killing based on amortization. Add in property taxes and it’s seems like a noose around one’s neck to own a home.
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