Cost of Debt: Your Lifetime of Interest Payments Could Add Up to $279,000

The cost of debt, measured primarily by the amount you’ll pay out in interest tied to mortgages, car loans and credit cards, is probably more than you’ve ever thought, if you’ve dared to think about it at all.

That figure could be as much as $279,000, according to That beats an estimated $245,340 in expenses needed to raise a child born in 2013 until the age of 18, according to a USDA report.
“A car payment here, a mortgage payment there, and pretty soon you’re talking serious money,” writes Gerri Detweiler for “By the time all is said and done, a ‘typical American’ may easily have forked over the equivalent of 10 years worth of paychecks to banks, card issuers and other lenders.” created a calculator for people to figure out just how much their loans and lines of credit may cost them over the course of a lifetime.
When calculating your lifetime cost of debt, keep in mind the impact of interest rates, which vary depending on many factors — primarily your credit score. Lower interest rates mean a lower cost over the long run.
To get lower interest rates, you need to shop around and keep a high credit score.
Of course, mortgages are the biggest culprits. Here is’s example:
“Let’s say you get a 30-year fixed rate mortgage for $275,000 at 4.5% interest. And let’s assume you don’t refinance (which usually means closing costs and starting over with a new loan). Instead you pay the loan off over the course of 30 years. Your interest on that loan alone totals just over $226,620.31.”

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