3 ms·

Then you pay more in interest rate... In. 30 to 40 year time. You end paying basically the same..

• lotsofpulp 8y ago
  With a lower principal and higher interest rate, you have the option of paying extra principal before it is required to be paid, resulting in lower amounts paid towards interest. With higher principal and lower interest rate, you're stuck paying the higher principal no matter what.
  • conanbatt 8y ago
    Not only that: high interest rate can be re-financed. Some real estate moguls say that its better to buy cheap with exp credit than expensive with cheap credit because of that asymmetry alone.
    • ishjoh 8y ago
      +1, that is a brilliant observation.
    • Gibbon1 8y ago
      Know a guy bought a house with a 19% mortgage in the early 80's when Volcker was trying to break manufacturing and labor.
  • Bombthecat 8y ago
    How many people have that extra income, to pay extra? I dont think that many people do.. (beside us here)
    • lotsofpulp 8y ago
      If you're buying a 15+ year mortgage and haven't budgeted any slack in your monthly payments and you're not expecting any income growth for 15+ years, then you shouldn't be buying the mortgage in my opinion.