No. of Recommendations: 0
I have a question concerning down payments.

We will be selling our current home in about 6 months. We have around $35,000 equity in the home. My question is, should we put most of this toward the down payment on our new home or invest the $35K and make a smaller down payment?

If we invest $30K and have an average CAGR of 12% in 20 years we would have $ 286,804.96. If I put $30K down as a down payment I would only be saving around $30,000 in interest that I would be paying over 20 years on a mortgage @ 8%. So, by my calculations we could make $250,000 by not paying a large down payment.

Are my calculations correct? What am I missing?


Print the post  


Useful Resources
Our Home Center has all you need to make buying and owning a home a great experience. Get or refinance a mortgage and much more!
Buying/Selling a Home FAQ

Mortgage Professor
Offsite resource for mortgage questions.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.