On Thu, 17 Sep 2009 08:11:17 -0400, BAR wrote:

JohnH wrote:
Given - CD maturing. Amount sufficient to pay off mortgage. Mortgage
rate is 5.25%. New CD rates - 3% for five years, 4% for seven years.

What would you do?

Stock market exposure is high enough.

Will be at the golf course pondering the situation. Back later.

No, I don't want to buy a red barn.

Do you have taxable income? Do you itemize? The 5.25% mortgage is not
really 5.25%, it could be as low as 3.5% when taxes are taken into account.

It is easier to cash in a CD for unexpected expenses than it is to get a
mortgage on a house to raise the money that your CD currently has.

Just some thoughts.


True, the interest is deductible. On the other hand, the earned
interest is taxable.

I've considered the 'unexpected expenses' scenario, and it's not a
player in the decision.

Thanks for the thoughts, Bert.
--

John H