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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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[–] sugar_in_your_tea@sh.itjust.works -1 points 3 days ago (1 children)

Which part?

This is the classic rent vs buy math, and it's always been pretty close (see this video). Renting is better if you'll end up paying people to do the maintenance for you, and buying is better if you'll DIY most of the repairs. The math is also very location and lifestyle dependent, where the closer to downtown you live or the more frequently you'll move, the better you'll be off renting; likewise, generally speaking, the further from downtown you live or the less likely you are to move, the better off you are buying.

I bought a place, because the math in my area and for my lifestyle worked out. Ben Felix (the guy in that video) decided to rent, because the math for his area and his lifestyle worked out. Both options work.

[–] the_q@lemmy.zip 5 points 3 days ago (2 children)

The part where a basic human need is commodified for financial gain and the normalization of it all.

[–] sugar_in_your_tea@sh.itjust.works 2 points 2 days ago

That's a completely separate discussion though. We make financial decisions based on how things are, and political decisions based on how we think they should be.

[–] hitmyspot@aussie.zone 2 points 2 days ago

While I agree that it should be more affordable and our system is broken, I don't think it's a bad idea to work within the system to see what works out as the best long term option for being better off, from a purely financial perspective. Then the security and emotional side can be considered perspective. More financial literacy, not less is what leads to changing the system. When people don't understand the system, they don't have the same level of political support for changes that can actually work.