This broke my brain a bit. Chart shows a typical $500K mortgage at 8% fixed. You’re mostly paying interest for decades. Equity only kicks in the last 7–10 years.

Total paid: ~$1.2M. Interest alone: ~$700K.

I get its pros but levering up into an illiquid asset in a post-ZIRP world .. ??

Pls help me make sense why this is sold as the safe and very normal thing to do.

most are desensitized to the risks and it doesn’t help that realtors are most times trained on only that single market, i don’t think the next 30 will be anywhere close to as easy as the last 30 in terms of real value appreciation

can be a good *life* choice tho while potentially not being the optimized financial choice

investor, photographer, nomad, exploring onchain & exploring the 🌎

this angle i am fully aligned with. good friend told me a long time ago that home ownership is a luxury, treat is as such.

yep, where ppl can get into trouble is thinking of primary home as an investment

i own a house and ive never seen it as a financial investment

its a life investment to have a happy family, happy kids, day to day quality of life

if be happy to pay any amount of interest on that tbh, as long as i can sustain it month to month

building /camp (nouns.camp) and nounsgrants.com

An accountant friend of mine tells me what he sees in the return ppl submit. He says $100k households paying 30k+ in interest is normal. I’d bet the “home owners” have no idea 1) what the split between interest and principal payments is and 2) just what those interest payments compounded over 20 years means. 

At some point, you have to ask where to draw the line on risk. Sub 5% mortgage holder, I’m sure it’s fine. 7-8% on houses that doubled since covid? Idk

im obv not an expert but the culture here is to max yolo your networth into a house once you have a family. Cant afford the interest rates of a big house? Get a smaller house. Cant afford that? Get a "pair house" or move to a smaller town or whatever you need to do.

The interest rates doesnt really matter even thou ofc youd prefer them to be low (but when low, market competition also higher so prices go up)

My point is that most ppl here never think about the financial outcome of buying the house -- the end goal is to have a house and means to support it (thru ups and downs, via a salary). At that point you "made it".

re-read your cast:

> have no idea 1) what the split between interest and principal payments is and 
most swedes do know i think..bc we have very clear rules for when you _must_ pay 1-2% of principal in order to get the loan..as your income and loan go down, you can choose to not pay principal anymore and use that money elsewhere (cant speak for america ofc, and i may overestimate the general swede)

> 2) just what those interest payments compounded over 20 years means
yes, i get this, but what are you gonna do? delay your life just bc rates are high? this might be a cultural difference but that line of thinking is quite alien to me/swedes

for us, about 40% of monthly net household income goes to house loan payments (we also pay off a part of the loan, so maybe actual interest is closer to 30%)

that feels normal and sustainable, having the house feels like its 100% worth it (if i didnt think that, id not own a house i recon)