Interest Rate vs. Interest Volume:
How Much You Really Pay the Bank
Discover why a low interest rate can still cost you hundreds of thousands, and how to save that money instead.
When it comes to mortgages, many people think that if they get the lowest possible interest rate, they’ve won.
And while it’s definitely a good thing, the whole idea is pretty deceptive.
Interest Rate vs. Interest Volume. What’s the Difference?
In the 1970s, the banks figured out that most homeowners only stay in their newly purchased homes for around seven years.
So, to ensure they got the most out of every loan, they created what are called “front-end loaded” mortgages.
When a mortgage is front-end loaded –– as all of them are now –– it means that the majority of the interest you owe the bank is tacked on to the first seven to ten years of your mortgage.
This clever little strategy is how the banks make sure they get their fair share in case you decide to leave your new home within that time frame.
WHAT DOES THAT MEAN FOR YOU?
These Examples Will Shock You!
WHAT THE MONEY MAX ACCOUNT
CAN DO FOR YOU
