What is risk priced at?
This is an important question, as to get the returns you are expecting,,, it is not zero. In your case, you are willing to take a chance that your money will earn 4-6%. It may not, in fact you can lose principle, never mind the interest. There hasn't been a risk free way to make that kind of interest for decades.
Paying cash means you efectively made 2.5% Garaunteed! RISK FREE! And this is tax free as well! Any other method of investing will be taxed at some point... A saving is never taxed.
And if you are in a position where you can save on taxes by claiming interest as a deduction... We are not even speaking the same language...You do realize that a deduction is not a dollar for dollar savings? Only a credit does that.
