I am curious,
Given that the capital appreciation occurs in the market as projected (very big assumption I know) is it better to purchase a property with a 2500 pm mortage or:
purchase a property with a 2000 pm mortage and put the extra 500 into paying off the loan.
In the first case you gain more on the capital appreciation because the property is worth 25% extra so you gain an extra 25% in capital appreciation for any given rise.
In the second case capital appreciation is less but you save in interest because you are paying off the loan more quickly
(assumption: both properties rise equally in line with the overall market
Given that the capital appreciation occurs in the market as projected (very big assumption I know) is it better to purchase a property with a 2500 pm mortage or:
purchase a property with a 2000 pm mortage and put the extra 500 into paying off the loan.
In the first case you gain more on the capital appreciation because the property is worth 25% extra so you gain an extra 25% in capital appreciation for any given rise.
In the second case capital appreciation is less but you save in interest because you are paying off the loan more quickly
(assumption: both properties rise equally in line with the overall market