> The first few years of your mortgage, you aren't gaining much of any equity. It's nearly all interest payments.
It might not have to be that way.
Where I live we have the linear mortgage. Every month I pay a constant amount back on the principal, and a variable amount of interest on the remaining principal. At the end of the mortgage (30 years here) it is all paid off. With this type of mortgage we pay the lowest overall amount of interest.
Because the monthly payment goes down each month, the first payment is the highest. As a result some people choose to get a different type of mortgage instead, even though the linear type costs the least in the end.
It might not have to be that way.
Where I live we have the linear mortgage. Every month I pay a constant amount back on the principal, and a variable amount of interest on the remaining principal. At the end of the mortgage (30 years here) it is all paid off. With this type of mortgage we pay the lowest overall amount of interest.
Because the monthly payment goes down each month, the first payment is the highest. As a result some people choose to get a different type of mortgage instead, even though the linear type costs the least in the end.