Hi Gaelgo
I am not really sure what the point of your calculations is?
Hi Gaelgo
As I said, you pay an annual rent for money. The longer you rent it, the more you pay. That really is the best way to look at it.
You are making a very complex comparison which complicates matters. After 15 years of a 30 year mortgage, you will have paid off a good lump of the mortgage. So you are not borrowing €250k for 30 years. You are constantly paying it down.
If people could only understand that interest is the rent paid for renting money, they would think much more clearly on a lot of issues.
Hi Brendan,
Sorry, my intention was not to over-complicate things but to introduce the concept of Net Present Value - today's value of money of future amounts , and the role and impact of inflation in a mortgage.
My point is not about the interest in a 15 or 30 years mortgage, it is about the wearing down of the value of money in the long term (not sure if this makes sense). In my view, the value of having the extra 7k (like in my example) is more valuable today than to pay off future debts.
Hope I am bringing my point across well.
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