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I have a fixed rate loan with "no prepayment penalties"

My understanding is that loan payments are scheduled such that early payments are almost entirely interest while late payments are almost entirely principal. If I decide to pay down or refinance a portion of the principal, how is interest calculated?

It seems as though my interest would have to be calculated as if I were paying/will be paying equal proportions of principal and interest at each payment, then the total interest calculated, then the new total interest redistributed according to some sort of interest-up-front distribution (amortization?).

Is this the case?

Or is the interest paid up front water under the bridge? In which case I'd view it as a substantial prepayment penalty.


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