How Much Will a $300,000 House Cost at 4% Interest Rate Over 30 Years
I hope you're ready for a bit of a shock. The correct answer, is D.
That's right. Your $300,000 home that you even put a $5,000 down-payment on, will still end up costing you $542,173.77! That means that you will pay the bank $242,173 in interest payments ALONE.
You nearly have to have TWICE as much for your house to take out that bank mortgage. Feeling sick yet? Believe it or not, this information may come as a surprise to more people then you might think. We are raised to believe that buying a home is a good investment, and that there is value in real estate, and I am sure that there is IF you have enough money to purchase a house without a mortgage. Otherwise, you better hope that your property value doubles by the time you want to sell it, JUST to break even.
So how much would this house cost if you didn't have a down-payment? Take a look at the mortgage calculator in the link below if you want to really learn what a mortgage costs, but to answer the previous question, if you didn't have a down payment, you would have had to pay a total of $628,108 for your $300,000 house. That's MORE then double it's value!
So think REALLY hard before taking out that mortgage. Are you really saving more then you would be if you were just renting? DO THE MATH, and figure that question out for yourself. You may be able to get a better interest rate then 4%, or if you live in a country like Australia, you probably have a much worse interest rate like 5% or 6%.
1% can make a HUGE difference in the cost of your mortgage. Do the math, and be ever watchful of interest rates. Banks want your money and they have a zillion ways to get it!
Learn MORE at Mortgage Calculator
To help with slow website load, we have put all photos for this article here: View photo gallery.