Interesting. I've never heard of that one before. I wouldn't have imagined a lender allowing you to break the link between principle and interest. In a normal 30 year mortgage the percentage of your payment that is interest goes down as you pay down the principle. How do they figure out what your monthly payment should be?Lex: I believe your interest is calculated based on the standard 30-yr ammatorization, but you only pay down the interest.