Increasing the downpayment by 1% ($45K additional out-of-pocket) decreased the total interest
paid on the life of the loan by $66K (total paid: $8.78M).
Using the initial numbers (20% downpayment), but decreasing the Annual Interest by just 1%, I
decreased the total interest paid on the life of the loan by $863K (total paid: $8.03M).
For fun, I decided to buy this home in January 7, 2021, the date of the lowest interest rates in the
history of 30-year mortgages (Russell, 2023). At a 2.65% interest rate, the total interest paid on
the life of the loan reduced by $3.67M! (total paid: $5.22M).
Clearly, every variable counts, but interest rate is incredibly important, especially when
considering the longevity of a financed purchase, such as a home. Now all I need is a sack of
cash and a well-calibrated time machine ;)
Russell, J. (2023).
Historical mortgage rates in the USA: Highest High and Lowest Low.