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Sorry - my mistake. I was going off memory. 2 times, including the principle. Looking here: https://finance.icalculator.info/mortgage-calculator.html https:/

Sorry - my mistake. I was going off memory. 2 times, including the principle. Looking here: https://finance.icalculator.info/mortgage-calculator.html https://finance.icalculator.info/mortgage-calculator.html I enter, Mortgage Amount: 100000 Annual Interest Rate: 5% Term of Mortgage: 30years The interest paid is 93255.20

blaser-waffle 6y ago
That's also a 30-year mortgage, paid off at the lowest rate possible, with no refinancing. And also leaves out that the rate of inflation over 30 years means your monthly cost decreases; hopefully you're getting inflation adjustments to your salary...
benibela 6y ago
But that is still cheaper than paying rent for 30 years
- bbeekley 6y ago
  I semi-regularly plug numbers into this Buy v Rent calculator by NYT [1]. They're pretty equivalent in the 10-30 year range and match housing prices I've seen. It's hard to beat the SP500's >8% average return [2]. [1] (paywalled) https://www.nytimes.com/interactive/2014/upshot/buy-rent-calculator.html https://www.nytimes.com/interactive/2014/upshot/buy-rent-cal... [2] https://www.investopedia.com/ask/answers/042415/what-average-annual-return-sp-500.asp https://www.investopedia.com/ask/answers/042415/what-average...
  - benibela 6y ago
    That can change depending on the area Then, I live in Germany. There is a 28% tax on stock market returns, but selling your home is tax free
    - bbeekley 6y ago
      Absolutely. I think one of the fun things about that calculator is that you can mess around with the numbers to try different situations. Perhaps there's a way to account for that tax (e.g. by using ~5.8% returns as the after-tax rate).
    - nicbou 6y ago
      Not in Berlin. It's tax free after a few years only, to prevent people from flipping houses. Also capital gains tax is around 26% (incl. solidarity surcharge), if it hasn't changed. However there are other scary things about house ownership in Germany. For example being liable for street work in front of your house for the first few decades. The city can decide to repave the street and stick residents with the bill.
- ultrarunner 6y ago
  In our area average rent has now overtaken our mortgage payment. So glad we got off that treadmill.
  - jlokier 6y ago
    It's cyclic. Where I live, when I was too young to buy, mortgage was cheaper. When I was old enough to buy, rent was cheaper and prices had already risen enormously, so I stuck with rent, and hoped prices would stabilise or fall. In retrospect this was a mistake, as prices continued to rise. Now mortgages are cheaper than rent again.
    - ultrarunner 6y ago
      That is interesting. I have only owned a house for ~7 years, so I likely haven't experienced this cycle. Thanks for the insight.

blaser-waffle 6y ago

That's also a 30-year mortgage, paid off at the lowest rate possible, with no refinancing. And also leaves out that the rate of inflation over 30 years means your monthly cost decreases; hopefully you're getting inflation adjustments to your salary...

benibela 6y ago

But that is still cheaper than paying rent for 30 years

bbeekley 6y ago
I semi-regularly plug numbers into this Buy v Rent calculator by NYT [1]. They're pretty equivalent in the 10-30 year range and match housing prices I've seen. It's hard to beat the SP500's >8% average return [2]. [1] (paywalled) https://www.nytimes.com/interactive/2014/upshot/buy-rent-calculator.html https://www.nytimes.com/interactive/2014/upshot/buy-rent-cal... [2] https://www.investopedia.com/ask/answers/042415/what-average-annual-return-sp-500.asp https://www.investopedia.com/ask/answers/042415/what-average...
- benibela 6y ago
  That can change depending on the area Then, I live in Germany. There is a 28% tax on stock market returns, but selling your home is tax free
  - bbeekley 6y ago
    Absolutely. I think one of the fun things about that calculator is that you can mess around with the numbers to try different situations. Perhaps there's a way to account for that tax (e.g. by using ~5.8% returns as the after-tax rate).
  - nicbou 6y ago
    Not in Berlin. It's tax free after a few years only, to prevent people from flipping houses. Also capital gains tax is around 26% (incl. solidarity surcharge), if it hasn't changed. However there are other scary things about house ownership in Germany. For example being liable for street work in front of your house for the first few decades. The city can decide to repave the street and stick residents with the bill.
ultrarunner 6y ago
In our area average rent has now overtaken our mortgage payment. So glad we got off that treadmill.
- jlokier 6y ago
  It's cyclic. Where I live, when I was too young to buy, mortgage was cheaper. When I was old enough to buy, rent was cheaper and prices had already risen enormously, so I stuck with rent, and hoped prices would stabilise or fall. In retrospect this was a mistake, as prices continued to rise. Now mortgages are cheaper than rent again.
  - ultrarunner 6y ago
    That is interesting. I have only owned a house for ~7 years, so I likely haven't experienced this cycle. Thanks for the insight.