Finance Question

[RunninHorse]

Our numbers are very similar, you figured for 3.25, I figured for 3.2. I didnt include the total paid in payments and interest in the post, but it is on my spreadsheet. The same money is invested in each scenario (both 0% down, and 20% down), the house ends up paid off after 30 years either way. The difference is the extra money in both scenarios goes to investments, which returns a lo 5%, and the 0% down investment money added up to more in the end.
What I want to crunch next is 15 vs 30, with the expectation that all of the money after the house is paid off is then diverted into an investment account. I have a feeling it will be even worse for the 15yr loan because you lose the time value of money... in other words, you are so busy paying off debt, that you wouldnt be making any savings/interest.

I may be missing something. It looks like our 0% down numbers are very similar, but there's a big difference between our 20% interest calculations. You said $154k and I calculated $88k.

Assuming my math is correct, your $70k down could save you $110k in interest over the life of the loan. Going with 0% down, if you can invest and turn 70k into 180k over 30 years, about 3.15% interest, you'd break even. The catch is you'd have to invest that 70k on day one of the mortgage, so that money would be tied up anyway. Or you'd have to get a great return on some other type of investment.

I hope that makes sense.

 

[coposrv]

Would you borrow $500k just so you could invest in the market?

At 3% I would


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[jrandy]

At 3% I would


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Part of the reason I haven't been paying extra on the principle off of my house. Extra payments have been dumped into the market for the past 4-5 years. While the market is performing, the math does add up.

 

[ON D BIT]

At 3% I would


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Paid off $700k home. You would take a $500k mortgage at 3% to risk it in investing?

That’s how many have lost their paid off home.