We have a truck loan at $29,000 at 3.9%, payment about $690/mo. I was thinking about transferring that debt to a fixed rate 8% home equity loan for 10 years after paying it down to $25,000. That would make my payment about $305/mo. Then I could use the freed up $385 to invest in a mutual fund at a higher rate of return, say 10% - 12%. I think this will be good for us as we will be making more money on that $385/mo than we were paying in interest on it with the original loan. The interest on the home equity loan will be tax deductible too, so that reduces the effective interest rate on that loan right? Original loan has 3.5 years left on it. I think I'm in a 28% tax bracket too if that is needed. Can someone confirm or tear down this thought for me?
- posted
16 years ago