Monthly salary (after tax): $3125
car insurance: $50
utilities (power, water, natural gas): $200
cellphone/entertainment (internet, TV): $250
car payment: $450
Monthly amount: $1525
Minimum payment: $1312.89
Total amount: $275,000
Although, Brent is able to afford a $300,000 home, it may not be the best decision. With a more expensive home, he will not be able to pay higher than the minimum payment. If he chooses a slightly less expensive house, he could save a significant amount of time and money.
Interest rate: 4.000%
Minimum payment (increased by 15%): $1509.82
Time saved: 30 years - 23.4 years = 6.6 years
Money saved: $472640.40 - $423881.97 = $48,758.43
Because the monthly payment is slightly increased, the buyer will be paying less interest overall. This will significantly benefit him in the long run since he will have decreased the total amount of money spent (less interest + less monthly payments).