Hear about how much debt everyone in the US has all the time, curious about some of your stories!
My bad debt is 10k left on a school loan from a for profit school that is now out of business.
Only other debt is house.
So how are you all doing with debt management?
I mean most people saying they don’t have any bad debt, but saying they have good debt isn’t too bad! It is interesting to know how much mortgage people are carrying.
But these days even mortgages feel bad. 400k at 7% is 28k of just interest. So houses feel way out of reach with current prices/rates.
If rates go down prices go up. So doesn’t feel like there is much winning for non home owners.
Not sure if you mean per year but mortgages are generally going to be over much longer time periods. A couple who I know are looking to buy somewhere new and are looking at getting £400k mortgage or thereabouts. With rates as they are now, and over 25 years, they’ll end up paying back £900k!
7% per year yes.
28k per year in interest on just a normal home is crazy.
Housing prices, like everything, is determined by supply/demand. Interest rates are only part of the equation.
The main reason housing is high right now is because of the supply side, and that’s low at the moment because COVID destroyed the global labor market and the supply chain, so materials are sky-high, with fewer people to do the work of building.
Also, as the stock market tanks people move their money into safer places, like cash or property, hurting the supply side even more. This is what cashed up Boomers are doing (yep, we can keep blaming them).
Housing prices won’t come down until supply outweighs demand.
With how much they push for 25+ years mortgages you’re going to pay way more than 78k for a 400k one.