Home loans would be a terrible example for your position. Mortgage interest is paid off disproportionately sooner than the principle and the bank still has a c

Home loans would be a terrible example for your position. Mortgage interest is paid off disproportionately sooner than the principle and the bank still has a claim on the property until the last penny is (re)paid. So long as they didn't finance a home beyond its value, they're ahead on paper well within the first year. (only needing to recoup the costs and commissions associated with closing the sale before the paper shows profit) Further, the 30-year fixed-rate mortgage didn't really exist until the government got into the business of subsidies and guarantees. Before that, the standard were balloon payment mortgages with larger down payments, far shorter terms and the eponymous balloon payments due at maturity (which greatly favored the bank's end of the deal in practice).