Abstract
In this pedagogical paper, we answer two questions: If someone has a fixed-rate mortgage and pays it off after only a few years, is the bank "ripping off' the consumer because of the low equity; and when is the interest portion of a mortgage payment exactly equal to the principal portion? The mathematics inherent to a fixed-rate mortgage dictate that a greater portion of interest is paid in the early years. To find the exact point in time when the interest and principal payments are exactly equal requires examining this question using continuous function mathematics.
Recommended Citation
(2026)
"Are Banks "Ripping Off' the Consumer When It Comes to Mortgages?,"
Journal of Economics and Finance Education: Vol. 21:
Iss.
2, Article 2.
Available at:
https://scholarship.rollins.edu/jefe/vol21/iss2/2
