The final option is the option that assumes paying the entire house off right away ($200K) and then subsequently looking at investing the monthly payment and what the house would be worth in the end.
As in the first two examples, the house would be worth approx. $700K in 30 years. No changes here.
I would take the $955 per month that was originally going to the mortgage and invest it at an assumed rate of 10%. This would be worth approx. $1.7M in 30 years. So, combined, the house and stock would be worth about $2.4M in 30 years.
As we can see, these options are in descending/ascending order.
The first option, of making no down payment results in the highest future value based on projections (estimates). However, this is also the most risky equation because it brings a high level of risk into the equation (low beginning equity in the house and the highest monthly payments).
The second option is less risky but it has a lower future value than the first option.
And finally, the third option is the least risky but it also has the lowest potential future value.
Which option do you think I should do?
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