4 ms·
Rent vs Buy has fairly standard calculators, especially when you're wealthy enough to factor in opportunity cost. If you're able to take a 30 year loan w/ a 2.
by ar_lan 4y ago
Rent vs Buy has fairly standard calculators, especially when you're wealthy enough to factor in opportunity cost.
If you're able to take a 30 year loan w/ a 2.7% interest rate and invest the rest of the equity, your house is cheaper than someone who buys it outright in cash.
The only time I would disagree with you, however, is for poor people. "Mortgage principle is not an expense" is correct over a long-horizon, but families living month-to-month that somehow managed to purchase a house are severely unlikely to be able to really capitalize on any value generated from that. I think your comment primarily applies to upper middle-class and wealthy people.
- bombcar 4y agoThe key for the people who are poor is they need to stay in the house much longer than normal, so that they begin to get the advantages of inflation and growing principle payments. But the working poor are also the most likely to have to change jobs, which either forces them into a long commute or having to sell the house before they're really built any equity.