Easily take out a loan to possess $100 at the mortgage loan away from step three%, I must pay $103
So i you can expect to for currency, come back $110, upcoming lower the borrowed funds within $103 and still turn out in the future of the $eight
Generally, costs from come back towards financial investments try more than the attention rates of the home loan. (This is extremely simplistic – home loan interest is calculated a tiny in another way, nevertheless concept is the identical.) In the event the my personal requested speed away from return into $100 regarding the stock market is actually ten%, following basically invested that money I might get back $110. Read more “Easily take out a loan to possess $100 at the mortgage loan away from step three%, I must pay $103”
