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If you buy a $225,000 house at 7%, you pay $45,000 down and $1,200/month. If things stay like that and you move after five years, you'll have about $169,500 lef
by mminer237 4y ago
If you buy a $225,000 house at 7%, you pay $45,000 down and $1,200/month. If things stay like that and you move after five years, you'll have about $169,500 left on your mortgage and thus get about $55,500 back out, $10,500 more than your down payment.
If you buy a $410,000 house at 2%, you pay $82,000 down and $1,200/month. If things stay like that and you move after five years, you'll have about $286,000 left on your mortgage and thus get about $124,000 back out, $42,000 more than your down payment.
- lotsofpulp 4y agoYou would have to account for the difference in down payment and opportunity cost of investing the $37k difference in down payments for the same period. So in the 7% scenario, you have $37k + investment return + $10.5k. In the 2% scenario, you have $42k.
- mminer237 4y agoI guess that's true. Assuming you yourself also get 7% interest, that would be another $15,000 you'd get, making you only lose $16,500 more.