If you take the 50 year and plow the $300/month you're saving over the 30 year and plow it all into the S&P500 and get average returns then you'll be able to pay off the mortgage in full in less than 25 years using the gains from the S&P and you'll also have dividend income during the 25 years

>>16844056

you can derive a formula, and you can even find it online, but how is it actually done by a business? with a spreadsheet.
define below parameters

l = loan (outstanding)
r = interest rate, let's say per month (normally sold as per year, but will normally be recalculated to and charged on a monthly basis)
p = period you want the loan to last
m = payment you pay every month

m is what you want to find. so you create your basic formula, each row is one month, stretch it to number of months, trial and error and round up to nearest whole number.

wa fucking la.

anyone that could derive a clean formula, or even look it up online, is wasting their time. the entire finance world is running on excel.

>>16844109
so, the formula will be
l(i) = l(i-1) - m + l(i-1)*(1+r)
and you just iterate from i=0 to i=k, where k = number of months, everything is given, now you just need to guess k.

>>16844061
In that case using the capital from the $300 monthly to pay off the loan early is dumb because the $300 funds are appreciating faster than the loan is. Instead of paying off the 50 year loan in under 25 years you're better off paying it off on the 50 year schedule and having something on the order of a million extra as well. Even if you get the 50 year and pay it off in 30 you're still going to do several hundred K better than the 30 year mortgage. The 30 is a ripoff

>>16844056
It's very simple:

Take the remaining loan amount and multiply it by (1+ 0.06/12).
Subtract monthly payment
Repeat for next month

Problem for 50 year loans is that the payment and monthly interest expense are almost the same, so you don't start really working down the loan for a long time

>>16844118
What would happen to the economy if everyone was rational and invested like this?

>>16844137
S&P500 average annual returns over any quarter century period are statistically significant to an extraordinarily high degree.

This 50 year loan is not a bad idea since in let's say ... 20-30 years either everything turns into india or the AI takes over and wipes all the banking nonsense away.
there's really no middle ground.

>>16844145
if dumb people started behaving smartly then what about all the smart people who have fortunes based on taking advantage of the dumb behaviors of idiots?

>>16844118
Congratulations, you've found the purpose of loans. Borrowing money to invest in a strategy that you believe will make you more money in the long term than the money you have to pay back. If you're competent and lucky, a loan is a mechanism to kickstart your earnings.
If you're retarded, you get a loan to buy a new iphone

>>16844056
It's directly proportional to how badly they want to fuck your delicate little asshole at any given moment in time. You'll have to check the back of your book for the formula, I lost mine ages ago.

>>16844217
That's the obvious marxist take. How true is it? The market isn't a zero sum game, at least to an extent.

>>16844109
nice

>>16844056
Dude, if an LLM can't explain compound interest and loan payment schedules to you then that is a (YOU) issue.

>>16844061
If you take the 400k and buy the house, you're done.
Until the property taxes are due next year.

>>16844112
>now you just need to guess k
JHFC

>>16844145
>>16844474
Thank goodness we have all the robots doing all the labor so we can chill and invest in random numbers and professional coin flips.

>>16844056
http://www.financeformulas.net/Loan_Payment_Formula.html
[math]
P = \dfrac{r \cdot PV}{1 - (1+r)^{-n}}
[/math]
spreadsheet: PMT()

>FIFTY YEAR MORTGAGES ARE STUPID!!!
So thirty is the magic number to not be stupid?
Why not ten years? Why not one year?
I think the only reason you believe 30 is good number is that's what we have right now.
I think if we had 20-year mortgages and Orange Man Bad propose 30-year mortgages, you'd be bitching and whining exactly as hard.
That's because you are a fucking hypocrite.

>>16850090
You're a kike, identified by jewish reply syntax.

>>16850090
>>16850121
>/g/toid reply syntax

>>16844056
>how monthly payments with interest are calculated
amortization tables

>>16844056
>Can someone explain
Its a scam for retards to pay more for the same house.

>>16850827
No, its a scam that raises the cost of housing for everyone by making non-competitive retards who will probably default in the near future anyway able to compete in the marketplace, significantly raising the housing demand while lowering the supply of housing.

>>16844056
6% interest is just the base inflation. So its basically 0% if you really take into account of the inflation of the money. Interest is just covering the annual inflation cost of the money.

>>16851935
No, loan interest is applied and compounded monthly while inflation is measured annually and doesn't compound.

>>16851936
Inflation definitely compounds

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19 KB PNG

>>16844056
>ChatGPT did not help me.
It can't even explain interest? lol

>>16851944
People lie on the internet just as often as they breathe

>>16851943
No, the annual inflation is just taken annually, there is no compounding taken into account when presenting inflation numbers. When you take two time periods to compare inflation, you don't compound anything, you just take the percentage the value of the dollar has decreased over that time. Its not at all that straightforward with interest calculations.

>>16851957
But when you say, for example, that inflation increases 6% per year, that's on top of the current value of money which is already suffering from inflation
Inflation over 5 years is
>1.06 * 1.06 * 1.06 * 1.06 * 1.06
not
>1.00 + (0.06*5)

I'm way too dumb for this conversation, but what I gathered is that just 300 into the S&P every month is enough over 50 years?

>>16851973
But if you are looking at the five year inflation instead of the annual inflation rate, you don't compound each year just like each year doesn't compound each month such as the case with interest since inflation is in retrospect and interest is foresight.

>>16844109
Okay. Now show that yhe numbers in the OP post are accurate. Because they sure as fuck aren't adding up for me.

>>16848660
that's right

>>16844056
You can play the interest game in reverse.
Just save and invest money in the stock market, it will grow and you will end up with more money than you actually saved.
Then instead of buying a 400K house for 1.4 millions, you buy it for 250K

>>16844056
It is just antisemitic guesswork. Enjoy your free home and don't worry about it.

>>16854814
Got a inside tip. Pro coin flipper D'Anté Brojones has an over-under of 47 flips in tonight's match.
He has an infected hangnail on his flipping thumb and will bow out before 20.
Go big on this one boys. My robots need juice.

>>16844056
in short and without elaboration it involves finding an unknown of the initial value of a geometric series.

>>16854904
Will do!

>>16844056
If you take out a 30 year mortgage at 30, you're likely to pay it off by 60. If you take out a 50 year mortgage at 30 you're likely to be dead by 80. So you have to make a higher repayment to make it less risky.

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624 KB JPG

>>16851974
definitely

>>16851974
You should do a course on basic arithmetic and then a course on basic algebra then a course on spreadsheets. Take as long as it takes. You'll benefit in the long run. Not being able to use a spreadsheet in this day and age is the equivalent of being illiterate.

>>16856724
>less risky
Your estate sells the house and splits the equity with the bank. Learn how things actually work before you criticize them.

>>16856966
study how to create a schedule of amortization