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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 2 points 2 days ago (1 children)

Yeah, figuring out what you need and what you can live without can make decisions very empowering.

The other poster mentioned the FIRE chart by MMM, so I'll take another angle on it. This site shows areas by cost of living. If you know how to estimate income generation from investments (~3% is a good rule of thumb before retirement age, 4% thereafter), you can find a place you can retire to if you have a few hundred thousand dollars/euros. If you're fine with a BR apartment, there are options as low as $600/month ($180-240k investments).

What I mentioned is called "Batista FI", so called because some parttime barista jobs provide medical benefits for even part-time work in the US. The idea is you save enough that you can live comfortably on part-time income and still meet your longer term retirement goals.

My point is the lower your expectations are for retirement, the earlier you can get there. And knowing you can retire can make working more pleasant because it's a choice instead of a necessity.

[–] Korhaka@sopuli.xyz 1 points 2 days ago (1 children)

Oh good point about the medical benefits if you are in the US, I live in the UK so that isn't something you need to think about.

[–] sugar_in_your_tea@sh.itjust.works 1 points 2 days ago

Yeah, if you have healthcare covered one way or another, then you just need enough to pay the bills if you have enough savings to grow into a retirement nest egg.