Quote:
Originally Posted by turbo6bar
The numbers are rarely as simple as you portray. As was pointed out earlier, how much of the mortgage interest deduction is eliminated by the standard deduction? On a $180k mortgage, the yearly interest would be roughly equal to the standard deduction. If Kurt V does not itemize deductions, his tax savings is nil.
Let's propose that Kurt V does get a full deduction on income taxes (total deductions of at least $21K+). A return of 4.68% is essentially a risk-free return, a 10 yr treasury bond. Add the liquidity of a HELOC, and it isn't a horrible investment. Is it the best investment? We lack the information to answer that question.
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Agreed,
That's why I typed in my last post that if you've got 10 yrs or less, pay off the mortgage.
(Usually a smaller mortgae by then, less interest to deduct and less time for the investments to out pace the risk free rate of return after-tax)
Also, I didn't realize Kurt was in Missouri where housing is cheaper and mortgages are typically lower.