Re: Would it be better to invest or pay down mortgage?
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Someone please explain to me why paying $10K in interest, to save $2.5K in taxes is good?
[/ QUOTE ]Say your loan amount is $200,000 and intrest rate is 5%, then you'll indeed pay $10k in intrest. But since you only have to pay $7.5k, you really only payed a 3.75% intrest rate. If you can get higher than a 3.75% intrest rate with your money, then taking the loan would be +EV.
Given a possible return rate of r, a mortgage rate of m, and income tax rate of t, we would need (m - t) < r for the mortgage to be +EV. If the calcs I just did in my head are correct, at least.
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This is a level right?
possibe? this implies risk? No?
go back to the drawing board plz.
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I'm wondering if you're leveling now.
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