Home › Forums › Housing › What if it doesn’t collapse? › I agree that it will look
I agree that it will look better, but not that good.
Say our renter is able to save $100k as a down payment.
Then our $400k mortgage becomes $300k at 8% which is $25k in payments/year.
Our $790k mortgage becomes $690 at 4% which is $28.75 in payments per/year.
Without considering tax impacts, this is a savings of only $3750/year or 13% Not an earth shattering amount for a price reduction of almost 50%.
Double the down payment, you get a 32% payment reduction, which does begin to look better, but not as good as many would expect.