What decision would recommend if were franks accountant

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Jack and Frank are considering purchasing a condo for $400,000 to live in near Vienna Metro. Although they have sufficient income for a 15% down payment, they would prefer to make only an 8% down payment. Their lender quotes them a 3.5% interest rate for a 15% down payment and a 5% interest rate for an 8% down payment. This year, they expect to have taxable income of $175,000. Mortgage interest paid deductions are tax deductible and Jack and Frank file married filing jointly.

Problem 1: If you were Franks accountant what decision would you recommend? (Hint: consider after tax cost of the loan or cash flow in the client's bank account)

Reference no: EM132617104

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