Joined Jul 2007
L5: Journeyman
Forum Thread
Payoff vs tax benefit - mortgage
February 3, 2023 at
02:03 PM
Thread Details
Hello,
I am thinking of paying off my home loan of around 300K. In past few years i have never recd any tax benefit out of my mortgage interest payment at 3-5%
I am not one of folks who can put this money in stock funds as they all tanked in last 1-2 yrs. I know they can now move up... but too much risk
Trying to get advice from fellow SD'ers if i should go ahead and payoff debt and avoid 1K per month interest that i am paying right now.
I will have 100K+ remaining in my account after the payout.
I am thinking of paying off my home loan of around 300K. In past few years i have never recd any tax benefit out of my mortgage interest payment at 3-5%
I am not one of folks who can put this money in stock funds as they all tanked in last 1-2 yrs. I know they can now move up... but too much risk
Trying to get advice from fellow SD'ers if i should go ahead and payoff debt and avoid 1K per month interest that i am paying right now.
I will have 100K+ remaining in my account after the payout.
16 Comments
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That said, normally if interest rates were in the 0.5-2% range like they had been for a number of years I would say pay down the debt with extra payments as much as you can afford to do so and be rid of of it. However, with current T-Bill rates for 17 and 26 week T-Bills being near 5% (state and local tax free), if you have 300k lying around, I probably would stick that in T-bills and let income from that offset the mortgage interest while carrying the deduction. You probably will come out a little ahead depending on the current effective rate of your mortgage\how much is interest vs. principal at this point, but that is just my opinion. Consult with a tax pro\accountant and have him run the numbers imo.