I’m not saying it’s a good bet. I’m just saying that it’s a better bet than the one your friends are making.
For example, on a $400,000 30 year fixed rate loan at 6%, your payment would be about $2,400. Your payment would be about the same on a $350,000 loan at 7.25%.
For the same property, I’d prefer the latter situation to the former. I have the ability to refinance much earlier in the cycle than I would on the 6% loan.
