Author Topic: is my thinking correct in regard to mortgage and investments  (Read 1405 times)

mohawkbrah

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been looking at mortgages for houses


and it hit me that maybe taking a 40 year term mortgage is better off (assuming im retiring in this property and won't be moving for work)

for example i borrow 100k for a house on a 40 year term at 4% interest total money repaid over 40 years is 200k at 418 monthly as opposed to 606 if 20 year term. the extra money i save from mortgage monthly payments that go straight into investing = 188 invested monthly extra over 40 years = 332k(im using the fire sim to calculate the average investment return)

making me in theory 132k better off when taking the longer mortgage term


does my math make sense. though of course more risk in investing and i may go as broke as a hobo. as well as mortgage rates could rise drastically over 40 years

*edit* just realized i made this in the wrong sub forum :(
« Last Edit: May 25, 2015, 11:51:16 AM by mohawkbrah »


forummm

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Re: is my thinking correct in regard to mortgage and investments
« Reply #2 on: May 25, 2015, 12:11:15 PM »
If you're going to invest for the long term instead of paying off the loan, try to get a fixed rate, or a rate that's fixed for a long time.