Quote:
Originally Posted by opendoor
There are no savings from lower interest rates. The purchase price of housing has simply been driven higher to compensate for lower rates.
So it's true a person with an $80K mortgage in 1980 has a similar mortgage payment to person with a $600K mortgage now after accounting for inflation. But paying off your mortgage was vastly easier back then. My parents managed to pay off their house in 15 years just by devoting a fairly modest 5% of their more or less median income to extra payments. To pay off a similar house now in 15 years with a similar income would require putting aside over 20% of your pre-tax earnings.
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Except you now have an asset that you can sell. You are better off having low interest high asset price than high interest low asset price over the long term.