BORROW OR BUY CASH?

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!

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