...and you thought Tysons had traffic now.

[Evan]

You aren't missing the discount, you're missing the point =P

You pay less interest every year dude, as you pay down the principle. That number is way higher than it should be.

Let's say it together:

A-M-O-R-T-I-Z-A-T-I-O-N

Keep reading young Padawan, maybe I'll get you into a house someday :wink:

Everyone understands that the interest paid goes down and pricinple paid goes up, its called basic economics. What you arent seeing is that the interest goes down extremely slowly. To use your example, the interest paid goes down $3.00 and pricinple up $3.00 (as in three dollars) every month initially. Even after 5 years (the common yardstick for a first house) you are only paying off $200 more of principle (and less interest) per month than you were when you began. (but you have paid over $200k in interest in that 10 years)
The point is that first year that you pay $42k of interest payments, instead you could save most of that money and do something smarter with it (like save it for a down payment for when the market is better), since the house is not gaining equity through appreciation in this market.
Personally Im not waiting for the big crash, quite the opposite, Im waiting for the market to pick back up again. Its the only thing that makes sense.