Inman

What is a simple interest mortgage?

“What are the benefits/drawbacks of a simple interest loan versus a traditional mortgage? Which would you take if offered the choice?”

I would select a traditional mortgage. If two loans are exactly the same but one is simple interest, you will pay more interest on it unless you systematically make your monthly payment before the due date.

The major difference between a standard mortgage and a simple interest mortgage is that interest is calculated monthly on the first and daily on the second.