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I don’t think you understand how banks earn money. People deposit funds which they then loan to others. The interest they get from the debtors is more then the

• aj7 6y ago
  If you have GOOD mortgage terms, (1) any prepayment should go to PRINCIPAL and (2)there should be NO prepayment penalty. (1)is sacred. If you don’t have (1), you are a noob. (2)is sometimes bargained away to get a lower interest rate, often, in the form of lower points. Once again, if you have a prepayment penalty without a demonstratable financial consideration, you are a noob. Don’t be offended, we are all noobs at one time or another. Banks are not educational institutions. Indeed, universities themselves are quite unforthcoming about the opportunity costs and ROI of their own products.
• deathanatos 6y ago
  And the bank does get the interest, for the duration for which the money is not in their hands. A "pre-payment penalty" sounds to me like the bank asking you for money while they themselves can then also turn around and loan that (now repaid, with penalty!) money out to another person desiring a loan, and get even more profit. > The interest they get from the debtors is more then the interest they pay depositors. The interest paid to most accounts these days is a pittance, adding less back than is lost to inflation, and many accounts have additional fees.
• deleted 6y ago
  [deleted]