What if you have plenty of discretionary income. You take out a 50 year mortgage at say 3.5%. Because you have good income you could pay it off much quicker. Instead you take that extra income and invest it wisely, say making 10-12% per year over time. Wouldn't it be wiser to keep the low mortgage payment and invest what you would have paid instead? That interest you earn is compound interest. I do believe mortgage rates are simple interest. Any financial guru's here to weigh in on this? Am I looking at this correctly?
What if you have plenty of discretionary income. You take out a 50 year mortgage at say 3.5%. Because you have good income you could pay it off much quicker. Instead you take that extra income and invest it wisely, say making 10-12% per year over time. Wouldn't it be wiser to keep the low mortgage payment and invest what you would have paid instead? That interest you earn is compound interest. I do believe mortgage rates are simple interest. Any financial guru's here to weigh in on this? Am I looking at this correctly?