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> $1000 is principal, $400 is interest Your numbers don't seem normal. Looking at a mortgage calculator, given a new $370,000 home price, with 20% down, 3.92%

> $1000 is principal, $400 is interest Your numbers don't seem normal. Looking at a mortgage calculator, given a new $370,000 home price, with 20% down, 3.92% interest... the P&I is $1,399. Of that, $967 is interest and $432 is principal. Those numbers are almost the reverse of yours. It wouldn't be until ~year 20 of the mortgage that the numbers would match yours.

dragontamer 5y ago
Try again: 15-Year mortgage 2.375% interest. Aka: current market conditions. With interest rates so low, your monthly payments are minuscule right now and make the 15-Year a good option. Any homeowner with good credit scores can right now switch off their current mortgage into a 15-Y 2.375% ish loan.
- kbelder 5y ago
  I bought a house three years ago. It burned down one year ago. I am buying another house this month that is 40% more expensive, and will be paying less on a monthly basis. This is due to (1) rolling over money invested into the first house, and (2) stupidly low interest rates. If you can realistically afford a house, I don't see how renting could ever make sense, at least not when the prices are close. Basically, consider a mortgage payment as a rental payment where they match 50% of your rent into a nice investment fund you can cash out anytime you like.
  - RHSeeger 5y ago
    You're simplifying it, though. - It's generally nowhere near 50% (of the cost of owning) going to principal - Buying ties you into the house, or at least ties other costs to moving. If you're likely to need to move again in under 5 years, that cost is high. - Related to the cost of moving, but... if you're moving to a new area and want to take some time to pick out where you're going to live for 20 years, then renting for a few makes sense. Honestly, there's just a lot of reasons that can make it financially reasonable to rent instead of own.
- RHSeeger 5y ago
  Most of the homeowners I know have 30 year mortgages. As such, my comment that your numbers don't seem normal is fairly accurate given the people I know. Is it a lot more common to take a 15 yr loan among your friends / in your area?

dragontamer 5y ago

Try again: 15-Year mortgage 2.375% interest. Aka: current market conditions. With interest rates so low, your monthly payments are minuscule right now and make the 15-Year a good option. Any homeowner with good credit scores can right now switch off their current mortgage into a 15-Y 2.375% ish loan.

kbelder 5y ago
I bought a house three years ago. It burned down one year ago. I am buying another house this month that is 40% more expensive, and will be paying less on a monthly basis. This is due to (1) rolling over money invested into the first house, and (2) stupidly low interest rates. If you can realistically afford a house, I don't see how renting could ever make sense, at least not when the prices are close. Basically, consider a mortgage payment as a rental payment where they match 50% of your rent into a nice investment fund you can cash out anytime you like.
- RHSeeger 5y ago
  You're simplifying it, though. - It's generally nowhere near 50% (of the cost of owning) going to principal - Buying ties you into the house, or at least ties other costs to moving. If you're likely to need to move again in under 5 years, that cost is high. - Related to the cost of moving, but... if you're moving to a new area and want to take some time to pick out where you're going to live for 20 years, then renting for a few makes sense. Honestly, there's just a lot of reasons that can make it financially reasonable to rent instead of own.
RHSeeger 5y ago
Most of the homeowners I know have 30 year mortgages. As such, my comment that your numbers don't seem normal is fairly accurate given the people I know. Is it a lot more common to take a 15 yr loan among your friends / in your area?