Quote:
Originally Posted by djohnson
i just bought a designer home and also surprised at the interest rate, very high - high 6% range. Debating should I take a low interest home equity loan and pay off over 10 years, or should I take money out of the bank and pay it off, or just leave it alone, it's that interest payment that kills me and not being able to deduct it off the taxes, as I understand you can't take a deduction from what I've read and talked to an attorney.
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Yes, that is the case you are not allowed to deduct it off taxes. That interest rate is ridiculous in this interest rate environment. The question is how long you will live in the home. There is a break even point, off the top of my head I'm saying it was 7 years (someone would need to check), could be wrong, whereby if you stay in the house 7 years, you're better off just paying off the bond upfront, because of the extra interest you're paying each year. You'd be surprised how fast 7 years comes up. We paid ours off, and I'm glad we did. I figure if we want to sell our home, it will be an inducement to attract buyers who are looking for a low bond or "bond paid" home.