Comment by tossandthrow
8 hours ago
I said that the monthly payment is the same. Not that you pay the same amount towards your loan.
An optional extra payment is worth more when interest rates are higher.
Ie. An optional extra payment of 1000$ will pay your 150$ a year in saved interest when the rate is 15% and only 15$ when the rate is 1.5%.
Everything else being equal, optional payments has a higher value, which represent value to the buyer.
This is true, but I was not assuming extra payments and I don’t know where you got that assumption from. Many people can’t afford to make extra payments given the already high cost of housing and the rising cost of everything else.
My initial complaint was merely that the interest rate it not neutral to buyers.