A 200K house on a 30 year mort. is 992, with a total paid of 594K if paid to term.
The same 200K on a 50 year mort is 880, with a total paid of 923K if paid to term.
The tradeoff is paying $112 per month less, to then pay 330K more over the term of the loan. That makes no sense. Please don't do this. For a large loan where you can prepay, send an extra $50 per month at the start of the loan, when the interest costs are largest, because the principal balance is the largest.
my income will have increased and the value of the dollar dropped due to inflation
The sad part about inflation is wages don't rise in proportion to the loss of the value of money. The idea that wages will rise to make the debt paid with less valuable money doesn't work for wage earners. If you have 200K in investments, like index funds, there's a reasonable chance the loan can be repaid with cheaper money over 10/15 years, but that's still a risky bet.
Same rate for both loans, the longer-term loan should be higher interest, to price in the risk of a devaluing currency. This would result in a slightly higher monthly payment for the 50 year loan and higher total paid, but the numbers are good enough for comparison.
The fact that you can pay almost 3x the original amount in a 30 year mortgage isn't better than paying almost 5 times the amount from a 50 year mortgage.
The bank is profiting 300 to nearly 1000%.
So they could announce 10,000 year mortgages for all I care. The entire system should be reworked to where the profit margin is only 25% at most, so if you get a 200k mortgage, they can get at most their money back plus 50k.
That's a fair return, they get 50k for doing nothing at all rather than hundreds of thousands for nothing at all.
Interesting fact: commercial properties have a payback of ~10 years; so 10 years of rent, net of expenses, should pay the cost of the property.
No reason houses shouldn't be the same way, in that 10 years of equivalent rent (which includes maintenance expenses) should pay for the house. That's dreaming, for sure.
A 200K house on a 30 year mort. is 992, with a total paid of 594K if paid to term.
The same 200K on a 50 year mort is 880, with a total paid of 923K if paid to term.
The tradeoff is paying $112 per month less, to then pay 330K more over the term of the loan. That makes no sense. Please don't do this. For a large loan where you can prepay, send an extra $50 per month at the start of the loan, when the interest costs are largest, because the principal balance is the largest.
The sad part about inflation is wages don't rise in proportion to the loss of the value of money. The idea that wages will rise to make the debt paid with less valuable money doesn't work for wage earners. If you have 200K in investments, like index funds, there's a reasonable chance the loan can be repaid with cheaper money over 10/15 years, but that's still a risky bet.
What interest rate are you assuming?
Used the default (6ish) here: https://www.calculator.net/mortgage-calculator.html.
Same rate for both loans, the longer-term loan should be higher interest, to price in the risk of a devaluing currency. This would result in a slightly higher monthly payment for the 50 year loan and higher total paid, but the numbers are good enough for comparison.
The fact that you can pay almost 3x the original amount in a 30 year mortgage isn't better than paying almost 5 times the amount from a 50 year mortgage.
The bank is profiting 300 to nearly 1000%.
So they could announce 10,000 year mortgages for all I care. The entire system should be reworked to where the profit margin is only 25% at most, so if you get a 200k mortgage, they can get at most their money back plus 50k.
That's a fair return, they get 50k for doing nothing at all rather than hundreds of thousands for nothing at all.
Interesting fact: commercial properties have a payback of ~10 years; so 10 years of rent, net of expenses, should pay the cost of the property.
No reason houses shouldn't be the same way, in that 10 years of equivalent rent (which includes maintenance expenses) should pay for the house. That's dreaming, for sure.
A 10,000 year mortgage might make more sense if it reduces your monthly payment to $5. Lol