What causes the total amount of interest paid on a mortgage to be so much higher than on other types of debts
What causes the total amount of interest paid on a mortgage to be so much higher than on other types of debts
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What causes the total amount of interest paid on a mortgage to be so much higher than on other types of debts
The total amount of interest paid on a mortgage is typically much higher than on other types of debts due to several factors. Firstly, mortgages are usually for larger amounts, as they finance the purchase of a home, which is more expensive than most other loans. Secondly, the repayment terms for mortgages are generally much longer, often spanning 15 to 30 years, leading to more interest accumulation over time. Additionally, mortgages often have amortization structures where the initial payments are primarily interest, which means that a significant portion of repayments in the early years does not reduce the principal amount owed. This results in a higher total interest cost compared to shorter-term loans or debts that might have different payment structures.