Business Math - Finance Math (24 of 30) Amortization - Loan Balance After x- Years: Ex. 2

[@nexthalf5607]

Is here the financial situation means the one who buy house for selling when the rates become down?

[@MichelvanBiezen]

When the interest rates go down, the monthly payments on a house goes down as well and typically the prices of houses will then go up.

[@Forseti6288]

Is it really true that you pay mostly interest in the first years in all cases? It seems like it varies quite a bit depending on the interest rate and amortization period. This is just from me playing around with several amortization calendar generators. For example, if you have a 2.6% interest rate for a 25 year amortization period (which I just had on my previous condo), irrespective of the principal amount, the principal payments seem to begin higher than the interest payments. Am I missing something? Thanks a lot for your help!

[@MichelvanBiezen]

On a 25 year loan that seems unusual, however as the rates go lower a larger percentage will indeed be principle.

[@nats50]

I wish you'd say principal instead of principle.

[@MichelvanBiezen]

You are correct. Thank you for the correction. (English is not my first language)

[@Clifffffffffford]

Thanks!

[@curtpiazza1688]

Yikeees! 😮

[@MichelvanBiezen]

yes indeed. This is good information