This might be duh for some people, but if you’re like me and considering a mortgage; at today’s rates in the US at around 5-6%, over 30yr mortgage you will pay about same in interest as you will for your house price.

Your $500k house will cost you around $1M total over thirty years.

I was surprised.

https://m.mortgagecalculator.org/?q=A1Nzy-8KX

  • Dave@lemmy.nzEnglish
    19·
    22 hours ago

    You might also be surprised to know that increasing your payments a little can shave off a lot of interest. Paying 10% extra on your payments saves you about $100k of interest on your $500k loan at 5%, and pays it off about 5 years earlier.

    • Couldbealeotard@lemmy.worldEnglish
      2·
      12 hours ago

      Unless you have offset accounts, in which case it’s better to hold surplus liquid that offsets the amount owing before interest calculation

      • Dave@lemmy.nzEnglish
        1·
        12 hours ago

        That works, but I don’t know if “better” is the right word. If you have the same amount offset or paid off, it’s the same outcome. The only difference is if you offset then you can spend it - for better or for worse.

        You could also bump your payments up and use an offset account for any extra.

    • davel [he/him]@lemmy.mlEnglish
      17·
      22 hours ago

      Anything above and beyond the monthly payment can go towards the principal, which is an especially big deal at the start of the mortgage. But be sure to verify that the bank is actually applying it all to the principal as you intend.