Let assume the house is $600k and the interest rate is 3.5% fixed for 30 years
Scenario #1 - 20% Down
$120k down payment
$2,155 / monthly payment
$296k in interest over the life of the loan
Scenario #2 - 30% Down
$180k down payment
$1,885 / month payment
$256k in interest over the life of the loan
Difference:
$60k more in downpayment
$270 less / month payment
$37k less interest over the life of the loan.
So if I take that $60k and invest it in the stock market and get a 6% rate of return over 30 years that comes out to $285k of interest, does that sound right? So does that mean it doesn't make sense to do the 30% down? How do I factor in the higher monthly payment to the calculation? That's $3,250 less per year in cash flow. Am I missing something obvious?
Submitted May 05, 2020 at 04:02PM by emotion_chip https://ift.tt/2yzkGtU
