[jlokier]

> $1700 per month pays off a $350k loan in 17 years, does it not?

No, it does not. You forgot the interest. Let's call it 6%, close to the current US average.

The interest by itself comes to more than $1700 a month!

Paying $1700 per month, you'll never pay off $350k, even with a 1000 year mortgage.

To pay in 17 years, you'd need to pay $2741 (plus fees) per month. Most of that will be interest at first, but it tapers down. If you want to start out not paying mostly interest, you'll need to pay at least $3500 (plus fees) per month.

[averageRoyalty]

The parent I was replying to stated a $70k deposit on this, meaning it would take about 25 years, so my early morning maths was a bit off. Even so, that doesn't seem unachievable?

[klipklop]

It's scary that you even have to explain this to another adult.

[ethbr1]

Yes and no. A lot of people have gaps in their financial education.

That said, mortgages aren't rocket science.

1. Assume at the end of the day you want the homeowner to be paying a stable monthly amount*.

2. In order to get there, you have {loan term}, {interest rate}, and {loan amount} as primary variables.

3. Assuming {loan term} and {interest rate} are constant (in a given mortgage market, at a given time), that leaves {loan amount} as the only variable.

So how do you get a constant monthly payment for a variety of {loan amounts}?

4. You add up all the interest that would be owed over the entire {loan term}, using {interest rate}, then divide each monthly payment into some proportion of {interest payment} and {principle payment}.

5. You also front-weight the interest payments, because at that time there's more outstanding total loan (versus at the end of the loan term, when only a little principle remains to be paid back).* *

Not super complicated. Yes, there's compound math, but conceptually simple.

* For some definition of stable, even if it readjusts on some schedule

* * Point in time interest pricing like this also makes future recalculation for over/underpayments easier, as you're essentially trued-up on interest payments at all times

[stavros]

I think the $70k downpayment mentioned in the original comment is what changes the math from "impossible" to "25 years or so".