When comparing 2 loans for the same amount and same amortization, but with 2 different interest rates, I used to think that the difference of the amortized payment would be about the same as the difference on an interest only payment. It’s not.
Example: $100k loan, with 5% vs 5.5% interest.
Interest only payments:
5%: $416
5.5%: $458
0.5%: $42 , which is the difference between the 2 numbers above
Same 2 loans, but 30 year amortized payments::
5%: $537
5.5%: $568 … the difference is not $42, but $31
The difference gets smaller the shorter the amortization period is, e.g. for 15yr term, the difference on $100k is only $26/mo.
When you look at the full amortization table, it becomes sort of clear. Well, sort of.