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Reply to "Taking out a second mortgage to buy stocks "
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[quote=Anonymous][quote=Anonymous][quote=Anonymous]When 30 yr mortgage rates were sub 3% and there was no cap on SALT, the upside of borrowing more to invest in the market was pretty high. With mortgages at 8.5% and the SALT cap in flux, the upside is much more limited.[/quote] Agree. Borrowing at 2.5% was reasonable, but borrowing at 8.5% is just dumb. [/quote] Why? Stocks are up 15% in the last year, and that includes a huge drop in April 2025. The last 6 months the market is up a whopping 27%. That’s way better than 8.49%. Plus, stock market gains are taxed at a lower rate than ordinary income, making this an even smarter move. OP will be able to simultaneously itemize mortgage interest to offset ordinary income in a likely high tax bracket while deferring taxes on capital gains and paying in the future at lower capital gains tax rates. Seems pretty smart, even at 8+%. Stock market has beaten that year over year for decades. [/quote]
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