Mortgage Payoff Interest: Why Total Interest Matters More Than Rate
Published on October 22, 2024
Homeowners are conditioned to obsess over their interest rate. But the real enemy of your wealth is the total interest paid over the life of the loan. This article reframes the goal: it’s not about getting the lowest rate, but paying the least amount of interest possible. We’ll show how a slightly higher rate on an efficient loan can save you hundreds of thousands compared to a low-rate traditional mortgage.
Table of Contents
The Illusion of a Low Interest Rate
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Calculating Your Total Interest Paid: The Real Cost of Your Home
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Amortization Schedules: Designed to Maximize Interest
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How a Daily-Balance Strategy Minimizes Total Interest
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Case Study: Lower Rate vs. Lower Total Interest
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Educational only, not financial advice. Estimates vary by spending patterns and lender terms.