Re: Owning a house.
I've always understood the benefit of buying a house this way:
If you take out a mortgage at 6%, but the interest is tax-deductible, it's really only 4%.
If your house appreciates at least 4% a year, then you are basically borrowing the money for free. If it appreciates more than 4%, you are getting a positive return on the bank's money that you get to keep.
Not only that, but your gain when you sell is tax-free also. Based on this theory, the idea is that if you buy a house and live in it for at least 5 years, you will have lived there for free, at worst.
Thoughts?
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