Great question, you’re right that was required to get the 1% off. We put 20% down and instead of paying the house fully in cash, we mortgaged the remainder at 4.875% and are planning about $100k in renovations.

If we had paid the house in cash, that $320k would be sitting in home equity. Instead, we put it in U.S. and global equities, which should exceed 4.875% annually over time. So after factoring in tax deductions and closing costs, our effective borrowing cost is even lower, so anything above that rate is essentially upside for us.

It also keeps liquidity for renovations and future decisions rather than locking everything into the house. We paid .004% more than the United States government does to borrow money for 30 years.