December 2025

Most homebuyers never really understand that the true cost of a mortgage is far higher than the advertised interest rate. While borrowers are told they’re paying 6%, the real effective rate—based on the total interest amount repaid—is often well over 100%, commonly around 115% over a standard 30-year term.

People understandably wish they were paying 6% or even 15%. Unfortunately, that’s nowhere close to reality.

A Real-World Example of Actual Costs

Sales Price: $600,000
Down Payment: $120,000 (20%)
Interest Rate: 6%
Loan Amount: $480,000

Monthly P&I Payment (360 months): $2,877.84
Total Paid Over 30 Years: $1,036,022.40
Total Interest Paid: $556,022.40

This means the borrower pays a 115% true interest rate—far above the deceptively