BORROW OR BUY CASH?
While borrowing interest rates are low, if you own almost all of the amount needed for the coveted real estate purchase, a question arises.
Does borrowing have an interest? Let me give you an example.
You want to buy a property at a price of 300’000 €.
An amount of 1% would earn you almost € 50’000 in 15 years.
A home loan at a rate of 1.05% over the same duration would cost 26’000 €.
By borrowing, you would then gain 24’000 €.
The profit of this operation would be furthermore interesting in the context of a rental investment because you would deduct the loan interest from the property income.
With this money put aside, you would then get a loan at a better rate.
Lastly, you will be calmer in case of an unfavorable life surprise!