Sorry, but it doesn't work quite that way. Loans are amortized by a fairly
complex equation, and your last statement is untrue. When the interest rate
changes for the same principal balance and term, both the interest and
principal
components of the payment will change.

Joe Parsons


Hoo boy. :-(

Where are you coming from with this?

You're trying to make a very simple idea unduly complex.

If I borrow $500,000 for any number of years, 500,000 of the dollars shown on
the total of payments line of the disclosure will be used to repay the
principal portion of the loan. Not a few less if the rate is X, vs a few more
if the rate is Y- or vice versa.
It costs 500,000 plus interest to pay back
a 1/2 million dollar loan. The *only* variable that can enter into the "total
of payments" math is the interest cost of the money, (including fees, etc).

We would agree, I'm sure, that a loan for $500,000 from Bank X for a certain
term should have the same monthly payment as
a loan for an identical amount, at an identical rate, for an identical period
of time, from Bank Y.

If we compare two $500,000 loans from the same bank, one at 5% and one at 6%,
the 6% loan will have a higher payment than the 5% loan and it is *not* because
the contract calls for any principal amount other than $500k to be paid back.
The difference in monthly payment is generated
exclsuively by the difference in interest rate if the term is identical.

Look at an amortization book. There are only four variables that combine to
determine a monthly payment: Principal balance, interest rate, periods at which
the payment is collected and term of contract. When the principal balances are
the same and the term is the same, (and if the periods of scheduled collection
are the same) if there is a difference in payment between two contracts it can
only be because the interest rate is different.