Hacker News Reader

Comment by nicholasjarnold | Hacker News Reader

Reasons other than "it helps me build a credit history":

* you think you can make more money by investing your 30k and letting it grow and compound

* you are very prudent with your cash on hand and would rather have immediate access to liquid cash than save a little bit on interest which you pay down over the course of <term>

Some of the dynamics here are a bit different when market returns are not looking great/steady and money isn't cheap anymore.

View on HN

> you think you can make more money by investing your 30k and letting it grow and compound

Mortgages especially. Mortgage interest is tax deductible and makes it easier for high tax bracket individuals to outperform their loan by investing.

> Mortgage interest is tax deductible

Since 2017, not really, due to tax law changes. Cap of $10k but that includes state taxes paid also.

I was under the impression that the $10k cap is for SALT and mortgage interest is separate? The mortgage interest deduction was reduced, interest on new loans is only deductable for the first $750k of debt, instead of $1M, and mortgage rates were really low in 2017; capped SALT + a relatively low interest rate on $750k might not combine to more than the standard deduction if you're married filing jointly. Certainly on my ~ $350k mortgage @ 3.15%, I stopped itemizing after the tax changes.

The bigger change for mortgage interest was the massive increase in the standard deduction in 2018 to $24,000 from $12,700. We were barely doing better than the standard deduction prior to that, and the increase put us pretty far into "just take standard" territory.

Absolutely not. That's property tax, not mortgage interest.

Reply on news.ycombinator.com