Now some people will say that interest rates are lower at the moment so the hours and years to actually pay off a mortgage will not be as high as the last two graphs show. True, but it is not out of the question for interest rates to rise and a interest rate of 6.3% is definitely in the "normal" range. And on the other hand, I did not include maintenance, property taxes, insurance which runs the monthly cost of an average house at least $600 a month in most jurisdictions in Canada. So the true cost of a home over 25 years for today's highly leveraged buyers ( using average wage and average house price) could be in the neighborhood of 50,000 hours of work. Somebody who works 40 hours a week from age 18 to age 65 will work 97760 hours. So for a highly leveraged buyer of today, you better love your house and your job for many hours and years to come.
Saskatoon Housing Bubble. To take a look at the short and long term fundamentals of the Saskatoon real estate market. To prove that Saskatoon and other parts of Canada have a housing bubble. Also looking at how the possible commodity bubble and troubles in places like China, the US and Europe will have on Saskatoon real estate.
Friday, April 13, 2012
How long will it take to pay off a mortgage for a highly leveraged buyer?
Now some people will say that interest rates are lower at the moment so the hours and years to actually pay off a mortgage will not be as high as the last two graphs show. True, but it is not out of the question for interest rates to rise and a interest rate of 6.3% is definitely in the "normal" range. And on the other hand, I did not include maintenance, property taxes, insurance which runs the monthly cost of an average house at least $600 a month in most jurisdictions in Canada. So the true cost of a home over 25 years for today's highly leveraged buyers ( using average wage and average house price) could be in the neighborhood of 50,000 hours of work. Somebody who works 40 hours a week from age 18 to age 65 will work 97760 hours. So for a highly leveraged buyer of today, you better love your house and your job for many hours and years to come.
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excellent stats
ReplyDeletemoney may buy happiness, but debt certainly doesn't. I wonder about the long term happiness of owning a nice place versus a mortgage that it comes with!
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