I have edited title, and also edited the first post to answer the question to make it easier for future readers.

here is the proposed answer - in case folks would like to discuss more..

===answer===

**My financial return is 2.3%, but the series of cashflows that give me this return are different. **

e.g. I think it is easier to understand this if you pretend you are the bank, e.g. imagine you were the bank and you loaned me 10k, I could pay it back it to you in two different ways:

230 euros per year for 20 years, **and then the 10k back at the end** (deposit account/interest only mortgage style)

624 euros per year for 20 years, **and 0 extra back at the end** (typical mortgage style - try Karl Jeacle mortgage calculator 10k loan, 20 years, 2.3%).

the cashflows you would get are very different, but the interest rate is still 2.3%

**You can visualise/understand the higher cashflow as getting back some of your capital each year, instead of getting it all back at the end.**

If you put your 10k in a hypothetical 2.3% after tax deposit a/c for 20 years, You get the former series of cashflows, if you pay off your mortgage you get the latter series of cashflows.

Nit: For me to end up with a similar sum from both cases at the end of 20 years, I would need to re-invest the additional cashflow at 2.3%