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Author: OldOne Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75530  
Subject: Re: Do you have a rational home equity policy? Date: 1/27/2005 11:28 PM
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Why not buy stocks on margin? After all, you can deduct the margin interest, so your cost of capital is only 3-4%. Of course margin interest is variable, but otherwise investing and having a mortgage is no different than buying on margin (something most sensible investors don't do). <P>

There is an enormous difference between a mortgage and buying stocks on margin.

If the house value declines the bank can not call the mortgage. If the stock value declines you get a margin call & either have to sell out at a ruinous loss, or come up with more money on a day's notice.
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