this post was submitted on 10 Sep 2025
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Yes, this is how interest works and how lenders make money. It's a lot.
The lessons are:
Pay a little bit more every month (applied to principal) to the effect of 1 additional monthly payment a year or more. It will dramatically reduce your overall interest and length of loan.
You're talking about a long loan, during that time rates will rise and fall. When they fall, you refinance at a lower rate. Don't extend your loan longer (don't take another 30 year loan after you've lived there 5 years, take a 25 year loan). That will give you the best market results for something you can't control.
Look at the terms of your loan and your average return on your portfolio before blindly paying your mortgage early. If you manage to refinance at a good interest rate, you can often make more money on the market than you save on your mortgage. If I applied the balance of my savings to my principal today, I would lose significantly more interest from my investments than I'll pay in interest to my bank over the life of my loan.