[maat55]

Originally Posted by kork13

Partly, yes--that's exactly right. But also, I believe the payment schedule itself differs from auto loans to mortgages.

With auto loans, your payments start out going (for example) 60% to interest, 40% to principal. Over time, that shifts so that you pay less and less toward interest and more and more toward principal. By the middle of your loan's term, it might be 20% to interest, 80% to principal. By the end, it's basically 95% principal and only 5% interest. So basically, you are charged all of the interest upfront. That means that accelerating payments saves you less interest, because you've already paid the majority of the loan's interest.

I believe mortgages are a constant ratio of interest-to-principal, or perhaps starts with principal being a more significant proportion. In addition to what you said above (mortgages are alot bigger), this is also why accelerating mortgage payments has a more significant impact.

I've noticed that mortgages are no different. you pay heavy in interest at the beginning, also. That's why 30 year notes are bad if you are selliing inside of ten years.