DH & I took out a HELOC a couple of years before we RE'd to finance a major home remodel. We have the cash to pay it off fully, but have left a balance of around $90K on it so that we could keep our cash invested in the market. So far this has been a really good decision.
With the latest rate hike, our HELOC rate will be at 3.99%. Still earning more on our portfolio, but as rates go up I want to set a "threshold" since paying off this HELOC has a guaranteed rate of return. I realize many on this forum don't believe in debt at all, but this HELOC is a VERY small percentage of our assets. Also we are still in a fairly high tax bracket for 2017 so the tax benefit is nice.
For those of you not averse to "smart" debt, how high would the rate have to go before you'd pay it off?
With the latest rate hike, our HELOC rate will be at 3.99%. Still earning more on our portfolio, but as rates go up I want to set a "threshold" since paying off this HELOC has a guaranteed rate of return. I realize many on this forum don't believe in debt at all, but this HELOC is a VERY small percentage of our assets. Also we are still in a fairly high tax bracket for 2017 so the tax benefit is nice.
For those of you not averse to "smart" debt, how high would the rate have to go before you'd pay it off?