The majority of early mortgage payments go to interest. The ratio of principal increases slowly over time but the distribution is very asymmetric. It takes 82 months to repay the first $50,000 of a $500K loan at an interest rate of 6%. But, it only takes 16 months to repay the last $50,000. That's 5x slower at the start. The asymmetry is more extreme for longer loans with higher interest rates with many ripple effects.

1. Short-term homeowners lose the hardest earned equity - Since amortizations don't build equity equally, a 6% transaction cost represents 4+ years of lost equity for short-term homeowners. The same 6% represents only 1-2 years of lost equity for long-term homeowners. As families become increasingly mobile, amortization adds salt to the wound of high transaction costs.

2. Refinancing reduces the rate but restarts amortization - Monthly payments decrease when you refinance for two reasons. First is a lower interest rate. Second is the re-amortization of a smaller loan balance over a longer term. An unintended consequence is a slower pace of equity build-up. In fact, some homeowners who restart their loans could pay more interest over time.

3. Expensive homes typically mean longer amortization - As homes get less affordable, 90% of homebuyers choose a 30yr fixed rate mortgage. Lenders have started introducing 40yr terms as well. That's terrible for building wealth. Amortization helps banks, not people, and keeps you in debt for longer.