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

submitted 3 weeks 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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[–] qwestjest78@lemmy.ca 5 points 3 weeks ago* (last edited 3 weeks ago) (1 children)

Compared to renting, you pay substantially more when you own. Maintenance, repairs, insurance, property taxes, full utilities. Mortgage is just the base you pay.

At the end of the day, sure you own the house, but all those extra expenses don't go away. Lately I have been seeing retired home owners selling because they can't afford all the upkeep so they end up moving into a smaller unit.

Decades ago buying was a no brainer, but do you really think houses will continue to appreciate at this rate? Will a 2 bedroom run down bungalow really be worth 2 or 3 million in 10 years? At least with renting you can invest that money you save from not buying and get a guaranteed return.

For the record, I'm not saying not to buy, but you should not just buy because you think it is a good financial decision. It might not end up being the case depending on where you live

[–] Alexstarfire@lemmy.world 3 points 3 weeks ago

I pay less, but I also got a 3% mortgage. Though, if you include things I purchased because I wanted them: smoker, pavillion, garden, etc then I've paid much more. Some things raise the equity of the house, others don't.