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A mortgage is "good debt"

BUT

You shouldn't buy more house than you need

Here's why:

1) Bigger payments:

Every $100k of mortgage debt you take on is an additional $500+ monthly payment you'll have for 30 years.

If this $500/month was invested in index funds, in 30 years you would have a portfolio worth ~$1m AND a paid off house.

2) More cleaning:

A bigger house doesn't just come with a bigger payment.

More of your time and energy (or money) will go towards cleaning your living space.

Even if you don't use a space, regular cleaning is required!

3) More property tax:

Property tax is charged as a percentage of assessed value (increases over time).

If property tax is 1%, every $100,000 of value will cost you $1,000 per year.

Over 30 years, property taxes on a home valued at $500,000 will have cost AT LEAST $150,000.

4) More maintenance:

More living space means more space that needs to be repaired and maintained.

Buying a bigger house might mean projects like painting, changing floors, or a new roof can cost A LOT more.

5) Expensive utilities:

Heating and cooling a big house could be a lot more expensive.

An extra 1,000 sqft of home could cost $1000+ per year to heat or cool, depending on where you live.

6) Wasted space:

All the room you have probably won't be used.

Having more space just means you need to buy more things to fill it up.

7) May not be a good investment:

Bigger houses generally have lower demand because fewer people can afford them.

This means prices don't increase as fast (or as much) as mid sized homes.

8) Higher closing costs:

Closing costs are 2-3% of the price of a home.

Every $100,000 you spend will cost you $2000-$3000 more.

Buying a bigger home costs a LOT more.

It can mean you:

- Might not invest as much as you should (or at all)

- Don't get to enjoy your life (because you're house-poor)

- Could go bankrupt if you lose your income and can't afford the payments

If you buy a smaller living space (something reasonable, not a studio) it may feel like you're getting very little space.

In reality, it's less space that will be occupied by fewer things.

Learning to cut down on buying material things will help build wealth over the long term!