[quote]quote:Originally posted by minimoke

1, do you think he could have saved $173,000 any other way with his deposit.
DM
If I may answer your first question – it is “yes”

Sorry to bore with numbers but heres how:

Back in 1995 it is likely a 25% deposit would have been needed to buy the home.

25% of $258k = $64,500. Put this away and get a 4% net return over 12 years gives you $37,000

Your 75% mortgage ($193,500) would cost $20,300 a year in interest at 11%. But RMB’s dad could have rented a house for say $200 back then. Had he rented he would have had $10,516 in cash extra a year.

By renting he would also have saved $1,000 in rates/ insurance a year.

$11,516 x 12 = $138,192 + $37,000 interest received + $64,500 initial cash = $239,700 equity

With your way he has $431,000 - $193,500 mortgage = $237,500 equity

[/quote
MINIMOKE, Fair enough, but the only hope the average guy has is to invest in property. If I had bought a house when i first arrived in NZ it would have cost me approx $8,000. Now if i were a total bum,that house would keep me in my old age with a reverse mortgage.
We are not talking about the astute investor who makes this or that, in business, shares or what ever, but JOE BLOW. NZEALAND has more JOE BLOWS than any country that i have ever visited. Give me an Indian kid off the streets of Bombay and i will show you a potential business person above your average every time. MACDUNK