Wednesday, 22 April 2020

Mortgage Woes

This is a tongue 'n cheek meme that I created poking a little fun at what is likely the biggest expense for most people; their home.

That is certainly true in our family. We are fortunate in that, when we still had "just one more payment" to go on our mortgage, our home was still in a little better shape than the one depicted here. Still, we too have various home improvement upgrades to do. I suppose that never ends.

With the length of many mortgages today, maybe this meme isn't too far off the mark for some folks. Consider a thirty-year fixed rate $200,000 mortgage at only 4.5% (I still remember 18% rates). At a monthly payment of $1013.37, by the time that debt has been paid off, the borrower will have paid $164,813.42 in interest alone, or a total cost of $364,813.20. All that just to get into their family dream home!

On top of that, add in the required minimum downpayment amount just to qualify for that mortgage, plus any other line of credit that may also be attached to the home, and you have a pretty hefty investment. Increase that 30-year term to a 40-year term, as I've heard some folks are choosing to do, and while the monthly payment may be slightly less, the interest to be paid back potentially goes up by another 25%.

I don't know how young couples today do it. All humour aside, it's all really quite sad actually.

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