House note vs car note

She has a good head on her shoulders baw. Go with it.

There’s a lot of potential questions with this plan.

Is the vehicle ~$80k?

What’s that $80k payoff do to your savings?

Why not get the car at 0% financing and continue as-is, knowing you have the savings to cover any expenses/notes/etc.? Both rates are low. Basically, why is this a trade-off question?

And ultimately, as the other poster mentioned, if this is her idea, and it makes financial sense in terms of savings/payoff and it’s just a matter of this vs that, GO WITH HER PLAN.

My opinion (not a financial advisor) you have 6 years left on the mortgage. Which means you have paid mostly interest and have almost all principle left for the remaining 6 years. Assuming a 20-30 year loan term. I wouldn’t pay it off now as the interest savings can’t be much.

I’m also going to assume that in order to get 0% finance the note term is probably short like 36 months so disregard the upside down comment because you will be paying it off so quickly that you won’t be upside down after the first 6 months.
The other poster had the best question. What does this do to your savings? Personally I would take the 0% finance and not pay off the house. And put that 80k into your investments.

The 80k would represent about 50% of our current cash savings. We recently sold a rental so that’s the reason for our abnormally high to us savings. The mortgage is a 15yr note that we originally took out in 08 but refinanced twice since the purchase. We like the psychological effect of having little to no debt. I’m mid 40’s, wife early 40’s and I’d love to leave the rat race between 55-60. Currently in my 24th yr with the same company.

This is a historic time in the car industry. I'm normally not a proponent of 0 down or even using OEM financing, because they usually don't let you have the rebates WITH the special rates, but things are different now and probably for a couple more months at least. Now they are letting you have rebates AND the special 0% rates, so its a great time to buy if you're going to do it. I bought last summer for that reason. I was going to have to have one more car anyway, might as well not tie up capital in one. Looking at the five year cash flow, I couldn't make a used car make sense.

WRT to the mortgage, do you need the interest deduction on your taxes? Might want to take a good look at what it does to your tax status, though as another poster said, you're paying mostly principal at this point.

Is there another option that gets you better returns? I hear some cat on here called Ancient Tiger can make you some bank in penny stocks!

Couple thoughts. Do you get any tax savings from the mortgage? Also, mortgage rate is 3.125% and any financial advisor can average 6% annual return on that $80k.

What if you used the $80k to max out Roth contributions which would then give you more tax deductions?

assuming the car note would be much lower than the house note, it seems like it wouldn't take long for you to recoup the 80k. i dont see you goin upside down on a car unless something bad happens. if you pay the house off and the car is the only thing you have i would assume you'd always stay ahead and pay it off before the 6 years. sounds like a good idea to me, but I'm no financial adviser. i dream of having no more mortgage to pay.