From Yahoo Finance: 2025-05-27 11:46:00

A single guy with $500,000 cash is debating whether to buy a house in cash or take out a mortgage. Friends and family advise against it. The decision hinges on mortgage rates; a low rate makes taking a mortgage more attractive. Real estate growth vs. stock market returns are key factors to consider.

Owning a house involves more costs beyond the mortgage. One commenter who paid in cash regrets missing out on investing the money elsewhere. Running the numbers is crucial to determine if a mortgage or cash offer is more advantageous. Stock market returns often outperform real estate growth, making a mortgage a potential better choice.

Real estate appreciation typically lags behind stock market returns. Investing in funds like VOO or QQQ may yield higher returns than home equity growth. Riskier investments like QQQ have delivered enticing long-term returns, making a mortgage more appealing. Consider the growth potential of your extra cash in funds versus home equity.

Read more: ‘Friends And Family Are Telling Me That It’s A Bad Idea’