Does a Lower Purchase Price Always Beat a Lower Interest Rate?

I’ve been thinking about how many investors focus almost entirely on negotiating the purchase price while giving much less attention to financing.

Let’s use a simple example.

Imagine two nearly identical rental properties.

Deal A

• Purchase Price: $300,000
• Interest Rate: 6.25%

Deal B

• Purchase Price: $290,000
• Interest Rate: 6.75%

At first glance, Deal B looks like the obvious winner because you saved $10,000.

But depending on the loan terms, that higher interest rate can increase the monthly payment enough to reduce—or even eliminate—the benefit of the lower purchase price.

That’s why I’ve started looking at every deal through multiple financing scenarios instead of asking only, “Can I negotiate a better price?”

I want to know:

• How does cash flow change if rates move another 0.5%?
• Does the property still meet my DSCR target?
• What’s the break-even occupancy?
• How sensitive is the return to insurance, taxes, and maintenance?

In today’s market, it seems like financing assumptions can have just as much impact as the purchase price itself.

I’m curious how everyone else approaches this.

If you had the choice, would you rather negotiate another $10,000 off the purchase price or lock in a mortgage rate that’s 0.5% lower? Why?