Settle a debate

[03ozwhip]

You want to buy a house. House cost 500k. You have 200k to put down. Do you....
A) put the whole 200k down for a lower mortgage payment.
B) put 20% down and save the rest to put bulk yearly payments
C) put as little as possible down, meaning larger mortgage payments, but max out yearly payment.
D) put as little as possible and put the rest into some sort of savings account.

What say you rich motherfuckers

[littledan]

i'm no finance bro, but I would put maybe 125 to 150 down, and keep the rest of the 200k as my emergency fund. you could put that balance of the emergency fund into a fixed rate investment, I think I'm getting like 4.5% on those right now. Withdraw anytime and put the interest earned into a lump sum payment on the principal each year.

[Tik-Tok]

If I'm buying a $500g house in Calgary right now, it's in need of some serious updating. So I put the minimum amount down that I can, and use the rest for reno's.

[phreezee]

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What say you rich motherfuckers

Put $200k down on a $1M house?

[vengie]

Depends on your risk tolerance.
I'd put $50k down, invest the $150k and make accelerated bi-weekly payments towards the mortgage to reduce the term of the loan.

[ercchry]

Depends on type of income, and consistency of said income.

Short and long term goals? Where are you in life? Kids?

Too difficult to say without more data points

[03ozwhip]

Alright you fucking guys lol his is hypothetical and not a real scenario. The house isn't dilapidated and your income is fine either which way you do this, kid is out of the house.

Now, I dont know how to do a poll otherwise I would have but ya, between A and D what is it.

[dirtsniffer]

Between the two options, I'd put down enough to get reasonable payments, and then put the rest in after to decrease amortization.

[03ozwhip]

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Between the two options, I'd put down enough to get reasonable payments, and then put the rest in after to decrease amortization.

Sorry, I meant between A-D not A and D lol but good to know.

[dirtsniffer]

A savings account, imo, only makes sense if the rate is higher than the mortgage, or if you know you need it for something, like a planned layoff or something. If you won't likely need the money, put it in the mortgage or something higher risk. Evaluate the use of a heloc as well so you can access the cash if there is a need

[schurchill39]

My risk tolerance is way lower than the rest of you. Assuming I had an emergency fund separate from this $200k (that I am assuming you earned selling drugs because hypothetical), I would put the entire amount down to reduce the principle amount that I am owing.

[killramos]

Buy house in cash. HELOC against house to invest.

[ThePenIsMightier]

If you still have debt, are you really saving?

[ExtraSlow]

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My risk tolerance is way lower than the rest of you. Assuming I had an emergency fund separate from this $200k (that I am assuming you earned selling drugs because hypothetical), I would put the entire amount down to reduce the principle amount that I am owing.

This is a very reasonable and low risk way to manage your finances. Let's face it most people need to be saved from themselves in matters of money. Jam it all in that mortgage right away, don't buy a more expensive house, and your downside risk is removed as much as possible.

[arcticcat522]

C. I would do C. Low payment if your sitchuation changes, still could have the mortgage paid off quick if you have the cash flow to accelerated bi weekly payments and lump sums

[Twin_Cam_Turbo]

I did A personally. Put 50% down, left the other 50% to be paid by wife, and now I save 40-70% of my net income for retirement each month.

[G-ZUS]

Where's E: what is a mortgage?

[max_boost]

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Buy house in cash. HELOC against house to invest.

I so fuck with you right now

[pheoxs]

I'm a firm believer in paying off a house asap because living mortgage/debt free is one of the best feelings in the world and insulates you a lot from life changes. That being said I would balance it against how much you have in your TFSA.

If your TFSA is maxed then put the entire amount onto the house. If you and your wife still have TFSA contribution room then fill that first then put the rest into the house. The tax free investments are hugely important to get started asap then focus on the house.

[S-FLY]

I'd put it all down, then heloc the remaining equity up to the max allowable ($25k?). The heloc is the "emergency fund".