Mortgage vs. paying off a property

[Stefanie Jensen]

Someone recently posted about paying off your properties versus holding a mortgage and leveraging. I know that a lot of money could be made long-term through leveraging. I choose not to do it because my business model does not require it. I want to own and manage 4 or 5 rentals that I own free a clear. I know money is cheap right now, but it’s not free. Not many people look at the numbers.

Say you buy a home for $250,000. You make a down payment of 20 percent of the price -- $50,000 -- and you finance the remaining $200,000 over 30 years. If the interest rate on your mortgage is 4 percent, you'll pay a total of $143,739 in interest over those 30 years. I want that mortgage interest in my pocket. I know there are a ton of models where I own hundreds of properties and I make it all back, but I don’t care, I can’t get over it.