historically, compound interest (which is the phenomenon that leads to the loading of mortgage payments in interest rather than principal) first appears in the Code of Hammurabi, and is based on the yield on seed corn. If I lend you some of my seed corn over a period of ten years, I have to charge something like compound interest in order to equalise the return I get by lending it to you with the return I could have got by planting it myself.
dd ^^^^^^ CB: I believe this gets back to the notion that money grows like seed corn. But does money just sitting in somebody's hands grow ? Also, help me with this calculation again ( did we do this last year ?). Even if we assume that money left sitting grows more money, that doesn't justify proportioning most of the first payments on the mortgage so heavily to interest over princple. If all the first payments were deemed to go to paying principle, and only after the principle is paid off proportioned to interest, the principle would be paid off sooner and there would be less total interest. Seems arbitrary way to make the borrower pay more interest that the first payments are heavily proportioned to interest rather than principle.
