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PSA, you will actually pay $1M for your $500k house at today's rates (lemmy.world)

submitted 3 days ago by randoot@lemmy.world to c/personalfinance@lemmy.ml

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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

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[–] davel@lemmy.ml 6 points 3 days ago (2 children)

Yeah, that’s how interest on debt works. It works the same way on your savings account, where the bank is essentially borrowing money from you at x% interest.

It’s actually worse in the case of mortgages because they’re front-loaded with interest, which will eat into your profits if you sell the house early.

[–] Croquette@sh.itjust.works 5 points 3 days ago

It's such a fucking scam that you pay the interest up front.

If you default on your house, the bank got a lot of money in interest and they get to keep the house.

[–] Albbi@lemmy.ca 1 points 3 days ago* (last edited 3 days ago)

I found a pretty interesting calculator that takes a lot of factors into account for buying vs renting. It's for Canada, but you could modify a bunch of the parameters to get an idea for your area.