The number that matters is not the payment
A longer term produces a smaller monthly payment and a much larger total cost. Comparing offers by monthly payment alone is how a worse loan wins:
| Term | Payment | Total interest | | --- | --- | --- | | 10 years | highest | lowest | | 20 years | middle | roughly double the 10-year figure | | 30 years | lowest | can exceed the amount borrowed |
Compare the total interest line. The payment tells you what you can afford; the total tells you what it costs.
The deposit does more than it appears
Every unit of deposit is a unit not borrowed and a unit not accruing interest for the whole term. On a long loan a deposit increase typically saves two to three times its own size — the largest single lever most borrowers actually control.
What is missing
The advertised rate is rarely the whole cost. Compulsory insurance, arrangement fees and account charges are added on top and are how two loans at the same nominal rate end up costing noticeably different amounts. Ask for the effective rate, not the headline one.
Questions
Why is the total cost so much higher than the price?+
Because interest accrues on the outstanding balance for decades. On a twenty-year loan at a typical rate, the interest can approach or exceed the amount borrowed. The total cost line exists so that figure is visible before signing rather than after.
How much does a bigger deposit help?+
Twice over: it reduces the amount borrowed and shortens the balance that interest is charged on. Adding to the deposit usually saves several times its own size across the term — which is a stronger argument than any rate negotiation.
Does this include insurance and fees?+
No. Property insurance, life insurance, valuation, arrangement fees and taxes vary by lender and country, and they are what separate the advertised rate from the effective one. This models principal and interest only.
What about paying it off early?+
Not modelled here, but the effect is large and front-loaded: an overpayment in year one removes interest for every remaining year, while the same amount in year fifteen removes very little.