I conclude that they should just work out the total repayable and be honest and say this is a 70% mortgage. not claim it's 2% but just keep re applying that 2% every month or week or day as they see fit.
Most of the time, the total interest paid is included in the amortization plan. It's also easy to figure out. Using my example, the exact payment was $536.82.
$536.82x12x30=$193,255.20
Total($193,255.20)-Principal($100,000)=TotalInterest($93,255.20) give or take a dollar.
And so according to your desire, you'd want them to say it is a 93% mortgage.
The reason they don't is that interest rates and compounding are typically done annually. You also have the ability to make extra payments sometimes, which can pay it down faster. The faster you pay the debt, the less interest you pay.
For instance, if you win the lotto, receive a life insurance payout, or inheritance, etc and pay off the loan within the first year, it's no longer a 93% mortgage but a 5% one.
To me, it makes more sense to say, you owe $100,000 your first year, or $98,398 your second year, and that you'll be paying 5% interest over that year.
Hey, kudos to you for admitting this! I mean that seriously. There are very few folks who actually try to learn and understand things: it appears that you're one of them.
But that depends entirely upon how long you take to repay it. If you pay the loan aggressively up front, you pay less; if you make minimum payments for as long as possible, you pay more.
