larger downpayment or larger loan amt?

[Daniella Ortiz]

I am looking to decide whether or not I should pay a larger downpayment or get more financing and pay a smaller downpayment. I was reading on BP and it seems like people calculate the ROI as higher if they make a smaller downpayment. This doesn't make sense to me. For example:

house A: 100,000 that increases by 5,000.  If I paid 100k cash (no loan) and it increased by 5,000 than the increase is 5%.

house B: 100,000 that is financed by bank (80k) and I pay 20k. It increased 5,000 as well. I read on here that my ROI then is 25% but how is that so? I'd still be paying the bank interest on their loan and so my ROI isn't 25%...

Thank you all for your help!

Daniella Ortiz

Austin, Texas