Anthony R. Gold
I believe Graham only implied that the lender's profit would be proportionalThis is merely a reflection of the fact that with an interest only
mortgage the principal balance remains unchanged, whereas with a
capital repayment mortgage it redeuces gradually to 0. The total
interest payable is proportional to the average principal balance
outstanding during the term of the mortgage.
I should also add that interest paid by the borrower is not the same
as the lender's profit.
to the interest paid. Is that not be correct, to a good approximation?