Eli5<- what are the pros/cons of borrowing money from the bank vs paying cash when buying a house?

Question

And why would it ever be a good idea to borrow if you can pay cash and pay no interest to the bank?

In: 18

Answer 1

If you have the cash to buy the house, it’s best to buy it and then get a HELOC, then use the money from the HELOC to invest in the stock market. You get a better interest rate that way, and at least in Canada it’s tax-advantaged (you can deduce your HELOC interest from your taxes, but you aren’t allowed to do that for a mortgage for a personal home).