I received this question earlier this morning from a fellow forum member and blog follower (name withheld for security and privacy reasons):
“Hi Burn! I’d like to ask for advice if it’s ok with you. It’s about our plan to have a house of our own. We’re currently renting an apartment for P6,500/mo so we’re considering taking a Pag-ibig housing loan of 2M with a term of 30 years, 8% interest per annum and a monthly amortization of about P17,000. Actually, P17,000 is almost half of our monthly budget already so we’ll be sacrificing a lot, maybe even our monthly 20% allotted for buying stocks..
So do you think it is much better to just put the P17,000 monthly in stocks and just withdraw from it when it reaches 1-2 M? Maybe after 5-10 years given the interest is 10% p.a.? However, the prices of labor and materials might have gone up considerably by then..
The loan seems more attractive now as the house can be built with in 6 months to a year so we also won’t have to pay for the apartment rent once we’ve moved in.. Continue reading On Buying a House – Invest in Stocks First or Get a Home Loan?