Why it isn’t a bad time to buy a home?

Wednesday Jul 14th, 2021


If you are thinking about buying a home but may be a little scared about the market because of the news headlines, this video is for you.

I just want to put the market in perspective. 

Let’s assume for these scenarios, that you have a 5 year mortgage with 25 year amortization.

If you bought a home 2 years ago and paid $800,000, put $100,000 down, your interest rate would have been 3.9% and your monthly payment would be $3,600. 

$3600 a month in the first year x 12 months  = $44,000 in mortgage payments in the first year.

Out of those mortgage payments, $17,000 would have gone towards the principal  or 40% of your monthly payment.

Over 5 years you would have paid $92,000 towards your principal.


If you bought a home today for $800,000 (well really that same home would cost about $950,000 today so let’s use that number.

Purchase price $950K, we will use the Same downpayment of $100,000

So now your mortgage is $850,000 but your interest rate is now only 1.6% making your payment $3,400.

In your first year you would make $40,800 in mortgage payments.

The difference is that $28,000 of that would go towards the Principal in first year  which is 70% of your monthly payment (the lower the interest rate, the more money goes towards principal)

So over 5 years, you would have paid down $140,000 towards your principal.


If you like this video, please like, share and subscribe to my youtube channel so that you can be updated about my upcoming real estate videos.


Post a comment