Which route would you take?

[Wayne Brown]

So I am looking into making my 2nd buy-and-hold rental investment soon and wanted to get your thoughts on what makes more sense on the loan for a 115K SFH.

Option #1 - 20% down payment (23K) with a 6.375% fixed 30 year rate. ROI 13.30% - Cash flowing $271 a month.

Option #2 - 25% down payment (28K) with a 5.375% fixed 30 year rate. ROI 14.38% - Cash flowing $362 a month.

What ultimately has more value? Saving 5K up front and controlling the asset or spending 5K to have a 1% gain on the ROI? Should I be less concerned about the 1% interest rate on the loan and always go with the 20% down payment since the goal is to have the tenant pay down the loan? Thanks for your feedback!