Making Money with Your Mortgage – Part 2

This post will help illustrate the power of the home equity line of credit and systematic withdrawal plan (SWP) strategy. Bob has a fully paid for house – its current value is $400,000. After reading my blog, Bob decides that having all his assets tied up in his house is not the smartest thing to do so he goes to his bank and gets a $300,000 home equity line of credit and invests the proceeds in equity index funds. At the same time he set ups a systematic withdrawal plan to pay the monthly interest cost.

Before we continue, let’s make a few assumptions – interest on the line of credit is at prime, which is currently 6%. The index funds perform at 10% per year. That is the average return the TSX index has produced in the past 50 years. Yes there were years when the returns were less than 10% (or negative) and there were years when the returns were well above 10%. But the overall average for the past 50 years is 10%. If you are going to do this strategy, you must be willing to go at least 5 years to ride out any market downturn.

Let’s say it’s 5 years later. Bob looks at his portfolio to check out how it’s doing. This is what his portfolio will look like.

Even though Bob had $18,000 taken out of the funds every year to pay the interest on the line of credit, the ending balance of his funds after 5 years is up over $70,000. In addition to that, Bob has been getting huge tax refunds every year because he was able to deduct the interest on the line of credit, which was paid by the SWP and not him. If Bob was in the 40% tax bracket he would get back $7,200 each year that he can use to buy more index funds. Then the numbers would look like this.

In five years Bob has been able to increase his assets outside of his home by over $100,000 and not a single penny came from his pocket. The longer Bob keeps this going, the better the numbers become. If Bobs goes for another 5 years, the value of the funds would increase to nearly $590,000. This is the power of compound interest. The longer you leave it in, the more you will make. In 20 years, the funds will be worth nearly $1.36 million. If Bob closed out the investment at that time, he would repay the $300,000 to the line of credit and have $1.06 million left over, plus a free and clear house. A pretty good way to retire, huh? Much better than just a clear title house and no money.

The beauty of this strategy is absolutely no money comes from your pocket. You are leveraging the equity in your home to make you money. To match Bob’s investment return of $1.06 million in 20 years with normal out of your pocket investing, you would need to invest $16,800 every year for the next 20 years (assuming the same 10% return). How many people can sock away $16K a year into investments? Yet, this strategy allows you to get the same results without ever having to reach into your wallet. If you have a lot of equity in your house, it’s time to put it to work and turn your home into a money train!

As always, please consult a qualified financial planner before proceeding with any strategies I give on this blog.

50 thoughts on “Making Money with Your Mortgage – Part 2”

  1. Ben says:

    I need to save all of these kind of posts somewhere… for when I have a house 🙂


  2. Thomas Czaszynski says:

    Hey great tips.

    I was wondering, if I go to a financial planner, they will know all these schemes you are talking about. So I don’t really have to hunt for strategies like this, I could just find out about them from a finanical planner??

    Also lets say you bought a house for 200k, and its real estate value went up to 400k. Does that entitle me to a 300k mortage, or can i only do a 150k?


  3. John Chow says:

    Not all financial planners know these strategies. I mean, they will know what a home equity line and what a SWP is but the concept of putting the two together isn’t what they teach in basic financial planning school. Most planners stick to the “Save 10% of what you make and put it into long term investment” pitch.

    If the value of the house goes up, the size of the line of credit can increase with it. So yes if the $200K house goes to $400K, you can increase the line to $300K. And of course your tax deduction will increase. It is possible to borrow so much that the tax deduction can reduce your taxable income to zero. If you make $100K a year and have a $1.7 million line of credit at 6%, the interest would be $100K a year. That wipes out your income and you will owe zero tax. On a funnier note, it will also qualify you for welfare since according to the CRA, your income is now zero. You’ll even get a GST credit cheque!

  4. Steven says:

    OMG John, you are a genius. Thanks so much for the great info.

  5. serwet says:

    A very nice setup but I think it is missing something. Aren’t we supposed to pay capital gains tax or dividend income tax on our “systematic witdrawals” which we use to pay off the interest on the equity loan? I think You need to incorporate this into your computations.

  6. Investorrrr says:

    Your 10% return might be a bit optimistic.

    Then again financial planners make money on sales commissions. Not on your actual returns! They should just be more honest and call themselves sales agents.

    For more of this type of stuff you may want to look at

  7. chuck says:

    Gee, if I had a paid for house, why borrow on it? Why not just invest what the payments would be for long term growth without any risk to my home?

  8. Fred says:

    And if your 10% imaginary return is actually a 15% real-world loss?

    It’s amusing that people are gullible enough (c.f. prior comments) to think this is reality.

  9. John Chow says:

    serwet – That is yes and no answer. In the first few year, there is really no tax on the SWP because it’s really more of a return of your money than income. Capital assets are not taxed until they’re sold. However, when it comes time to close out the investment, the tax man will be waiting.

    Investorrrr – The 10% return is based on the average return of the TSX index for the past 50 years. Also, I’m not a financial planner. I can’t sell you investments even if I wanted to.

    chuck – Why not borrow against it and invest what you were paying? 🙂

  10. expectingrain says:

    This is a great strategy for disaster. You said “But the overall average for the past 50 years is 10%.”

    Go back for 50 years and tell me how many times it was actually 10%. Probably only 1 or 2 at most. You don’t take in to consideration DEVIATION. Some years its down 20%, others up 23$. If you catch a down 20% year at the wrong time, you’re in trouble. Be very careful with averages. They make things seem easy on paper that don’t play out in the real world. For example if my office is 80 degrees in the summer and 60 in the winter, its AVERAGE temp is 70, which is comfortable. However, the results that got to that average weren’t comfortable. Think about it. If you don’t address standard deviation and risk management, your plan does not work.

  11. Me says:

    John makes an incorrect assumption in his calculations. All interest earned on the money is taxable as income. So not only do you have the write off from the mortgage loan, you also have to subtract the interest earned on the index funds. Therefore you’ll be pushed up in the tax bracket and may pay even more.

  12. Juan says:

    Chuck says “Gee, if I had a paid for house, why borrow on it? Why not just invest what the payments would be for long term growth without any risk to my home?”

    Because you will make more money on a $100,000 investment that you could on a $1,000 investment.

    I think that 10% is not unfeasible (though not easy, these days). Provided you are making more money than you are paying for the money (the spread), the investment pays off.

    Look for some “tax-free munis” to reduce your capital gains exposure.

  13. John says:

    Isn’t this just a form of investing on the margin which is widely considered to be extremely dangerous? WHat happens if the $300k investment tanks and the value drops to $150k, now your guy is seriously in the hole with nothing to show for it. There’s a reason you shouldn’t invest money you can’t afford to lose…

  14. cam says:

    Interesting technique!

    The only issue I have is with the second part of the math…investing $175,644 each year for 20 years at 10% annually compounded interest would net you something more like $11 million dollars- a far cry from the $1.06 million (consider that the $175,644 x 20 is $3.5 million alone, without any interest.) If, however, you invested $16,824 a year foir 20 years at 10% annually compounded you would end up with $1.06 million.

  15. I enjoyed this read!!! This is a wonderful idea. Now I just need to apply a little calculus/algebra for optimizing the maximum leverage to invest!!!!

  16. Ralph says:

    If you don’t get a mortgage and put the $18K into an investment paying the same 10% rate (vs paying a mortgage) you would have 409K (300K + 109K investment) and have ZERO risk to your home.

  17. Alex says:

    A tax-free muni is a great idea. The one i’m most familiar with pays 6.75% tax-free. This only comes out to a 0.75% gain, but with no additional taxes.

    In somewhere like California, where real estate prices are incredibly inflated but selling is hard, this might be a good choice — 0.75% (+ tax credit from mortgage payments) on $1million is not much worse than 4% on $300k.

  18. Nerd says:

    John Chow,

    Please show me where I can make a 10% annual risk-free return.


  19. Tyler says:

    Don’t forget that you can never borrow beyond your cost basis on a piece of real estate and get a tax deduction for the mortgage interest.

    Home equity debt limit. There is a limit on the amount of debt that can be treated as home equity debt. The total home equity debt on your main home and second home is limited to the smaller of:

    * $100,000 ($50,000 if married filing separately), or
    * The total of each home’s fair market value (FMV) reduced (but not below zero) by the amount of its home acquisition debt and grandfathered debt. Determine the FMV and the outstanding home acquisition and grandfathered debt for each home on the date that the last debt was secured by the home.

  20. Hiltonizer says:

    or you could be smart, and buy a second property with the money, and rent it out. You will earn whatever you collect in rent, plus however much the property appreciates.

    Yah.. i’m wicked shmatt..

  21. Fred says:

    TALK TO A FINANCIAL PLANNER before trying this. There are a LOT of issues with this, starting with the fact that a Home Equity Line isn’t tax deductable in many cases. If I recall correctly, it’s deductable if it’s used to PURCHASE OR IMPROVE the primary residence. So in this case, it wouldnt be.

    Also, the RISK you are taking on is greater. Do you want to do that?

    And if you are in the zone of AMT, watch out even more. If you don’t know what AMT (Alternative Minimum Tax) is, you better find out before you try anything like this. Learn the rules BEFORE you try this!

  22. whatever says:

    This is a ridiculous article. There are no index funds that will return 10%. It is also difficult to get a home equity line at 6%.

    So in a best case scenario you make 1-2% net (because of taxes on the 10%), in a worst case scenario you lose whatever the market does.

    Even optimistic financial planners only plan for 6-8% return, and this is assuming tax-free compounding in something like an IRE or 401k.

  23. Stephen says:

    My statement says 6% on my Home Equity Line. Someone is getting a bad deal! I should be a loan shark.

    I guess US and CDN tax laws really are different!

  24. John Chow says:

    Thanks for all the comments guys. A few notes. This article was written with Canadian tax laws in mind, not US. The prime rate here is 6% and that is what you can get a home equity line of credit for.

    The main advantage for this investment is no money comes from your pocket and it’s hands off. All the other methods talked about in the comments require you to reach into your wallet or be hand on (as would be the case if you purchased another property and rent it out).

    But I do agree with Fred in talking to your financial planner before trying it. However, the interest on a home equity line is tax deductible if the money is used for investment purposes. In Canada it is NOT deductible if it used for home improvement.

    Cam – Thanks for the sharp eye! I have corrected the statement.

  25. Cody Frisch says:

    John Chow.

    Even in the end, you asked who can afford to sock away 16K a year? Well how about anybody not paying off a mortgage or HELOC anymore! If the hypothetical person in this article could pay off their mortgage, before they started this program, they can afford to put that same money into investments. So basically anyone who doesn’t fall for this idea should be able to put 16K a year into investments!

    Remember even taking out the HELOC you reached into your pocket, your house is an asset! It is something of value, and you’ve gone and given the bank that house to put the cash into the stock market.

    No thanks I want to still have that home be a part of my net worth!

  26. Ray says:

    Just as another poster said, this is nothing more than BORROWING on MARGIN. It’s a loan against your house.

    …and like another poster said, the markets have major swings. The first year you could be down 15%, and then if you gained 5% the next year and then 10% the year after that, not only would you not be even you would be below your original amount.

    Think about it this way. You borrow $1,000 from the bank that you can’t afford. The first year the market goes down 15% and you now have $850.. let’s say your interest payment ends up being $50. So now your initial investment is $800 and you are down 20%. So let’s say your investment goes up 15% the next year and you have $950, but wait, you own another $50 (estimate) in interest. So now you are down to $900. The 3rd year the market goes up another 10%. So you have $1000, but wait you owe another $50 in interest. So after year 3 you have $950. So even after making 10% overall you are down 5% due to the interest involved.

    The above is just a crude example, but the point is you are borrowing money you don’t have. If you can AFFORD to lose the money then go ahead and take this RISK.

    That’s all this is.. you are taking a RISK that the market will go up more than it goes down and enough to cover the interest payments you need to make.

    Think of this simply as gambling, because that’s all it is.

    I would not do this personally.

  27. Jon says:

    This is idiotic, put a paid house on the line AND borrow against your perceived home value to invest? If you feel so confident about the (currently) crashing home values, why don’t you invest in some of the home indexes?

    Dow Jones US Home Construction Index$DJUSHB&p=D&yr=1&mn=0&dy=0&id=p76292778457

    Morgan Stanley Basket of Homebuilder Companies Index$HBS&p=D&yr=1&mn=0&dy=0&id=p43276522975

    Oh, wait, that’s not a good idea…

  28. Doug Brenner says:

    What happens when the US real estate equity bubble truly pops, and we have rampant bankruptcies nationwide? IMHO the equity index funds could be in for some difficult years. I’d hate to lose my house just because everybody else did!

    Of course that environment would also be an opportunity. But putting all your eggs in one basket is generally unsound investment advice.

    The financial strategy itself seems very sound to me. Just diversify the investment portfolio more, balance it out so that everything isn’t sitting in a single sector. Put some in bonds, some in large cap, small cap, growth & value, some in internationals, some in metals; it’s really the standard drill, except try not to leave any of it in cash (as that wouldn’t make sense to buy cash with a mortgage.) Then rebalance it periodically. Yes that sounds like work, but there are some balanced funds out there to make it all super easy and take care of that for you.

  29. joeBob says:

    You so stupid. stoopid. you.

  30. John Chow says:

    I maybe stupid. But you know what? I have the financial freedom to be stupid! Can you say the same thing?

    No one has ever gotten rich without borrowing money to do it. And I mean RICH, not comfortable. You think Trump puts up any of his own money when building a new tower?

    You can go ahead and stick to your “Don’t get into debt and save 10% of what you make and invest it” mindset.

    We can compare portfolios in 20 years.

  31. Scott says:

    This is very similar to the book Missed Fortunes 101. Except he recommneds putting the borrowed funds into a life insurance policy which have guaranteed rates of return. Although, I don’t think you can do SWP’s with those.

  32. ron says:

    i love this part

    let’s make a few assumptions – interest on the line of credit is at prime, which is currently 6%. The index funds perform at 10% per year.

    anytime you assume your return will be better than the interest rate you pay your plan will look good, regardless of the plan

    for tax purposes you can deduct the interest but only against your capital gains, so either you sell some stock and claim the interest or it builds up until you do sell…

    either way, as always, including taxes makes the numbers worse, not better

  33. Bill says:


    You nailed it (among others). Borrow at 5%, lend at 10%. Duh…

    John Chow made a good point initially, which people have forgotten: you HAVE to stay with a scheme like this for AT LEAST 5 years to maximize your chances.

  34. jeff e says:

    yeah – but the question is, can he withdraw the equity cash – tax free – he has put into his equity index funds, and still get a return on the full cash value of what is in the eif?

  35. ky says:

    Try this site again

  36. ASSumptions says:

    IF you have a fully paid for house; AND you live in Canada; AND you can afford to make the payments during the years that your portfolio doesn’t make money, then this is for you. If you live in the U.S. you have to remember that you will also be paying taxes on the capital gains, so the tax savings aren’t truly equal to the interest paid on the home equity loan. Just another rich guy who forgets that the average person doesn’t have the paid in full house to start this, risky at best, scheme whose benefits are overstated at best.

  37. Steveo says:

    This plan won’t work well in the US anyway.
    You can only deduct interest on the first $100,000 of home equity debt.
    Second, you neglect the extended riskiness of the stock market. You mention that the gain may be more or less than 10%, but that volatility is important since you’re betting with borrowed money, you’ve leveraged yourself.
    Finally, most importantly, even assuming a 10% expected return, you haven’t paid taxes on that! It depends on your marginal rate of course, but it’s reasonable to expect to get only half.
    A low-risk and tax-free investment might be municipal bonds, or treasury bills which are partly tax free. Both will give you about 3.5% a year in the end.
    So, if you change your assumptions to make it a $100,000 loan (the maximum), add at least 1% for points and fees, and assume a 3.5% riskless tax free rate.. you end up with a bad financial plan.

    Or, think of it another way. Banks can get money even cheaper than you can, currently 5.25 fed rate, and they can deduct interest too. So if borrowing money at 6% (minus tax deductions) to invest in the stock market is such a great plan, why don’t banks, which have even better rates, borrow and invest even more? Answer: because it’s not profitable, both from expected net return and especially for the risk you accept.

  38. John Chow says:

    I am not 100% sure how capital gains tax is handle in the US, but in Canada, you are not taxed on the gain until you sell the asset. Until then the asset is allowed to grow tax free. So if the index fund goes up by say 50% in one year, as long as you don’t sell it, you’re not taxed on it.

    Yes you are selling $18K worth each year to cover your interest charges but the tax charges on that will be min or none. Your financial planner can set up the SWP so the $18K coming out every year is viewed as a return of the money you put in, and not a capital gain.

  39. Jon says:

    It appears that this plan could work although it’s nearly impossible to predict all future economic conditions. Although great sparking the idea.

  40. Anna says:

    I am a Canadian and in Canada this strategy would work in any doomsday scenario with the following assumptions:

    1. Get a good, dividend paying, US blue chip, diversified stock portfolio in noncyclical sectors (tobacco, food, drinks, personal hygiene products, drugs) with at least 3% dividend yield. You might need to wait and time a market to get this yield but this is very doable as we are not talking about 5% yields. Try Mergent dividend achievers for the good candidates. Their list only includes the companies with at least 20 years of uninterrupted dividend increases and currently it lists around 300 companies.

    2. Get a margin investment account but do not use a margin to buy the stocks.

    3. Buy stocks with the HELOC with tax deductible interest which is currently 6% in Canada but after taxes would work around 3% assuming the top margin tax rates.

    4. Pay the HELOC interest with margin withdrawals and deposit 3% tax refund immediately into investment account to add to 3% dividends and cover the 6% margin withdrawal fully.

    5. Consistent dividend increases mean eventual stock price increases to end to the same average dividend yield.

    If the real estate prices decline and HELOC is more than a house price use margin withdrawals to cover the HELOC shortcomings. You might need to do that for a number of years but margin should weather at least 10 consecutive bad years however unrealistic that might be and in a long run you will be better off.

    In Canada we are allowed to deduct the full HELOC interest from the earned income without any cap, and we do not pay any Capital Gains tax until we sell the investments. The other great thing in Canada is that we do not pay any tax on a sale of a principal residence – Nada, Zero, Zilch!!!

  41. Chris says:

    Interesting. I like to run these things through the “what would Dave (Ramsey) do?” ringer…

    Their house payment should be around $3500, assuming that they put 10% down and had a 15 year fixed mortgage (that’s what Dave would do). Now that the house is paid off (it was paid off to begin with, remember?) they have that payment that they can apply to this investment. Hmmm… $3500 each month at 10% (your number, not mine) comes to just over 2.5 million over the same 20 years. AND YOUR HOUSE IS PAID FOR.

    Read this guy’s blog for the car comments, not the financial advice.

  42. John Chow says:

    Chris – Very good but you’re forgetting one thing. In your example, you have to take $3,500 out of your pocket each month. Zero comes out of mine and that $3,500 saved can be used for what-ever-the-hell I fell like.

    Of course there is nothing preventing you from doing both at the same time. 🙂

  43. Sean says:

    Thanks for pointing this out John, I’ve got the ball rolling with a financial planner on this. I’m young and probably less risk averse than most, this seems like a great way to leverage and reduce my tax burden. I don’t know about dumping the money into the stock market or even real estate as this point in the Vancouver market, much more comfortable investing the money in my own business ventures – a 10% return, heck 25% return, is easily achievable!

  44. Mario says:

    John, sounds like an interesting approach. One question (within Canada) …what if you borrow the HELOC from yourself in the form of borrowings from a Self-Directed RRSP? This would increase your wealth further as the interest payments you make are to yourself, in a tax-deferred RRSP.

  45. Neal says:

    John, excellent analysis. I wanted to remind some of the posters that ANY investment contains risk. Without risk there can be NO profit. You can always manage the level of risk by your choice of investment. If a 10% average return fund is too risky, then choose a lower risk, lower return fund. By the way, I am using lower risk to mean lower volatility.

    Different investors can handle different risks. Investing in emerging markets keeps some people awake at night. That just means all investments are not right for all investors. I hope no one is suggesting that emerging markets should be off limits since they could decline by 40% next year. While they may decline by 40% in a year, the use of emerging markets in a portfolio hardly amounts to gambling.

    Also, it’s not too difficult to achieve a high enough return to make this strategy successful. Anyone in a 33% tax bracket (combined federal/state/local) will have an effective interest rate of only 4% on a 6% home mortgage loan. There are plenty of low risk investments that should beat 4% over 5 years. Of course profit will be less if the return is lower, but as John keeps pointing out, I’m paying nothing out of my pocket for the return.

    I’ve been implementing similar strategies for a few years with credit cards that offer interest rates in the 0% to 4% range. Of course, with my credit card approach and with your home mortgage approach there are plenty of details to master, but this is a natural part of any investment.

    It’s true that in the U.S. only interest on the first $100,000 would be deductible, and the credit card interest I pay may not be deductible, and there are often loan fees to pay, but it’s still a beautiful strategy when implemented properly. For the creative and motivated investor, there are plenty of tweaks to overcome all these issues.

    Not everyone has a $400,000 home anyway, especially in the Southest U.S. where I live. A $100,000 implementation is still a sizeable investment that can lead to a significant nest egg in retirement. If nothing else, it is a forced retirement savings plan.


  46. well said Neal. Out all the comments, it’s all about risk. How much risk are you willing to take? We all have to do what’s comfortable to us.

  47. From the irs website

    Home Equity Debt

    If you took out a loan for reasons other than to buy, build, or substantially improve your home, it may qualify as home equity debt. In addition, debt you incurred to buy, build, or substantially improve your home, to the extent it is more than the home acquisition debt limit (discussed earlier), may qualify as home equity debt.

    Home equity debt is a mortgage you took out after October 13, 1987, that:


    Does not qualify as home acquisition debt or as grandfathered debt, and

    Is secured by your qualified home.


    You bought your home for cash 10 years ago. You did not have a mortgage on your home until last year, when you took out a $20,000 loan, secured by your home, to pay for your daughter’s college tuition and your father’s medical bills. This loan is home equity debt.
    Home equity debt limit. There is a limit on the amount of debt that can be treated as home equity debt. The total home equity debt on your main home and second home is limited to the smaller of:


    $100,000 ($50,000 if married filing separately), or

    The total of each home’s fair market value (FMV) reduced (but not below zero) by the amount of its home acquisition debt and grandfathered debt. Determine the FMV and the outstanding home acquisition and grandfathered debt for each home on the date that the last debt was secured by the home.

  48. Will says:

    Some interesting comments here: For those who are interested in this strategy, as indicated, I would reccomend to discuss with a “Trusted” Financial Planner. You will find companies, such as TD Canada Trust, B2B Trust and AGF Trust who will actually offer Leveraged Loan programs WITHOUT the need to use your house as security. They have 100% Loans with No Margin calls, where they will lend up $$’s to individuals to invest in Mutual Funds. If you are someone who is contributing to a RSP (Canadian version of 401K) you may want to consider a Leveraged loan instead. Do the math on Capital Gains vs. 100% taxable income on RSP at retirement, along with less restrictions on when you take the income (69 years old converting to a RRIF)both have the same Tax savings available. The Leverage will be higher risk, but as mentioned, if you have a long term time horizon, many of the “Risks” are diminished over 10 – 20 years.
    Also strongly reccommend to refer to Talbot Stevens website at: for some more information.

  49. Blair says:

    I’m not going to argue with your 5 year plan just yet, but five years is a very short time. You are exposed to market risk over the five year period as has already been pointed out. My problem is with your extrapolation to 10 and 20 (!) years. After the five year period is up, you are not only exposed to market risk and real estate risk, but you are also exposed to interest rate risk. What will mortgage rates be in 5 years when your fixed term is up? You’re creating a scheme using the average return of the TSX, and the current near-historic lows of interest rates. If you use the average market return, you should at least consider the average mortgage rate. Since 1979, that rate is about 10% (, mostly due to the high rates in the 80s and early 90s. (Note you can also remember the 80s by the real estate crashes.) Consider your home investment plan carefully under those types of “average” conditions. Forget for the moment how careful you have to be when using averages. Just consider your 10% average return on your portfolio, and the 10% average rate on home mortgages, plus friction due to taxes and either rebalancing costs under a do-it-yourself plan or index-fund annual costs.

    Really all you’ve done is sold yourself out of real estate, gone short on interest rate and bought equity. It might work, or it might not. It’s a bet on the future returns of at least three risk classes.

    Furthermore, if interest rates do go up, people tend to dump equity and buy fixed income products. This causes downward pressure on your index. The same correlation that makes your plan look so good now makes it look so bad under alternate, but realistic market conditions. You’ll have a hard time making money on the flying interest rate products while paying interest on a loan, so you can’t win. The downside of your plan is that over the first five years, interest rates rise causing downward pressure on the index. Over only 5 years, this is a real risk. You’ll come out at a loss, and if you’re lucky, you can eat that loss and unwind yourself from a plan failing due to market conditions you bet against. Remember, if you look at the market hard enough, it usually starts to look efficient.

  50. Jamie says:

    I think you would be much safer investing the excess cash (from the would be mortgage payment) in a fund that guaranteed 7% and carries no risk. Yes, less risk usually means less profit. But, I think taking a 300k loan out and playing on the edge is a bit risky for most folks.

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