The French Amortization Trap: Why Early Payments Matter Most

Have you ever looked at your mortgage statement after 5 years of paying faithfully, only to realize your outstanding balance has barely moved?

You aren't crazy. You are just caught in the French Amortization System.

The Problem: The Interest Front-Load

Almost all mortgages globally use the French system. It is designed to ensure a stable monthly payment for you, but it is also designed to maximize profit for the bank as early as possible.

In the early years of a loan, your payment is mostly Interest, not Principal (Capital).

• Year 1 Payment: €1,000 (€800 Interest / €200 Principal)
• Year 20 Payment: €1,000 (€100 Interest / €900 Principal)

The Agitation: The €1 vs. €2.50 Reality

This structure means that a generic "extra payment" is not worth the same amount of money at different times.

If you pay an extra €1,000 off your mortgage in Year 1, you eliminate that capital before it can generate 25 years of interest.

If you pay that same €1,000 in Year 20, it saves you almost nothing, because that capital has already generated most of its interest costs.

Every month you wait to start overpaying, the ROI (Return on Investment) of your money drops. The bank loves procrastination because they front-load their profits.

The Solution: Attack the Curve Early

The most powerful financial move you can make is to attack your mortgage aggressively in the first 5-7 years. This is the "Kill Zone."

By injecting capital early, you skip over the most expensive part of the amortization curve. You don't just shorten the loan; you delete the years where the bank makes the most money.

📱 The Amorti Simulation

Let's visualize the "Kill Zone" using AmortiApp.

1. Set up a standard loan: €300k, 30 Years, 4.5%.
2. Simulation A: Add a one-time payment of €10k in Month 12.
   • Result: You save roughly €28,000 in interest.
3. Simulation B: Add the same €10k payment in Month 240 (Year 20).
   • Result: You save only €4,500 in interest.

The Verdict: The same €10,000 is worth 6x more if used today compared to waiting.

Don't let the curve beat you. Check your "Kill Zone" savings now.

Simulate Early Payment