Following previous post. What does different Loan Tenure mean to our personal cashflow .

I’ll try to show it here with a chart.
Assuming we got a property.

Cost of Property $125,000
Down Payment 20% $25,000
Loan Amount 80% $100,000
Yearly Interest 5%
Yearly Cash Supply $13,000
Yearly Inflation 3%

With the above figure.
A 10 year loan will require monthly instalment of $12,727.86
A 30 year loan will require monthly instalment of $ 6,441,86

10YrC is Cashflow (cash on hand) with a 10 Year Loan
30YrC is Cashflow (cash on hand) with a 30 Year Loan
10YrPV and 30YrPV the those cash in todays value (Present Value).

As you can see, at end of 30 Years, we’re $65,000 or 25% richer with the shorter loan. In today dollar term, we’re $27,000 wealthier.

From another angle, if we use longer loan, by year 5-6, we’ve save enough cash (~$30,000) for down payment to another property even if we’ve 0% interest for those cash on hand.

Break even for both is around 20years. After which we’ve more cash on hand with the shorter loan.

So, is it better to have long or short loan?