1 · TODAY
Your current home
Your mortgage. Your existing debts.Mortgage rate3.25%
- Full house payment
- $2,950
- Other debt payments
- + $2,600
TOTAL EACH MONTH$5,550
Your starting point
PLAN YOUR NEXT MOVE
Higher rate. Lower monthly bills?
Compare your home today with two ways to buy your next home.
Illustration only. Today’s 3.25% rate and $2,950 full house payment are sample assumptions, not verified client figures. Change the numbers for your situation.
Both purchase options: $600,000 home · 7.5% fixed · 30 years. Full house payments include taxes, insurance, HOA and entered mortgage insurance. Mortgage insurance: $0 for option 2; $0 for option 3. Confirm actual costs.
OPTION 3 COMPARED WITH YOUR HOME TODAY
$1,004less leaving your bank account each month
$5,550 today − $4,546 after the move = $1,004 less per month
Higher mortgage rate. Lower total monthly bills.Eliminate $2,600 in debt payments. Account for a $1,596 higher house payment. See what is left each month.
Starting monthly cash flow only. Debt payments would end as debts are repaid. A larger mortgage can cost more over time. No future refinance or income increase is included in the savings above.
Where does the sale money go?
Sale money after selling costs and mortgage payoff$270,000
$600,000 sale − $300,000 mortgage and liens − $30,000 selling costs.
Set aside $15,000 for purchase closing costs and prepaids. Option 2 puts the remaining available proceeds toward the home, up to the purchase price. Option 3 puts $100,000 down and pays off $100,000 of selected debt.
See every number side by side
| Your money each month | Today | All proceeds down | Down + debt payoff |
|---|---|---|---|
| Down payment | Not applicable | $255,000 | $100,000 |
| Mortgage balance | $300,000 | $345,000 | $500,000 |
| New mortgage principal + interest | Included below | $2,412 | $3,496 |
| New taxes, insurance + HOA | Included below | $1,050 | $1,050 |
| New mortgage insurance | Included below | $0 | $0 |
| Full housing payment | $2,950 | $3,462 | $4,546 |
| Other debt payments | $2,600 | $2,600 | $0 |
| Total monthly obligations | $5,550 | $6,062 | $4,546 |
See the mortgage tradeoff and exact calculation
You borrow $155,000 more with debt payoff. At 7.5% for 30 years, that adds $1,084 in monthly principal and interest, plus $0 in mortgage insurance difference.
After 5 years of scheduled payments, the debt payoff option has $146,657 more mortgage balance and $56,684 more mortgage interest. This excludes the interest and remaining balances on debts kept in the larger down payment option. Those debt rates and terms are needed for a complete long term comparison.
Monthly principal and interest = loan × monthly rate ÷ [1 − (1 + monthly rate)−number of payments]. Monthly rate = annual rate ÷ 1,200. At 0%, payment = loan ÷ number of payments.
Paying off separate debts with sale proceeds while putting less down leaves a larger loan secured by the new home. Lower monthly obligations do not necessarily mean a lower total borrowing cost. Review cash reserves, debt payoff dates and any student loan benefits before deciding. A future refinance depends on rates, costs and qualification and is not included.
Rates and costs are illustrations, not a quote or approval. Both options use the entered fixed rate; actual pricing may differ by down payment. Mortgage insurance is entered separately and is held constant in this illustration. Taxes, insurance and HOA are estimates. Figures are rounded for display.
This example assumes you sell before you buy. It does not include moving costs, taxes on the sale, outside savings or the cost of owning both homes at once.
YOUR NEXT STEP
See the example. Make a plan for you.
Which numbers fit your life? Eric can help you look at the payment, the cash you keep and what could change next.
- 1Explore an example
- 2Choose what to share
- 3Plan a Discovery Call
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