Pay off my 2.87% mortgage or buy a new house
I’m trying to decide what makes the most sense financially as I prepare to get married.
I currently own a home with $200K left on the mortgage at 2.87%. I also have $100K in cash that I could put toward the mortgage, bringing the balance down to about $100K. My future husband would be moving in with me, and he’s completely comfortable with us staying in the current house and working together to pay off the mortgage.
My other option is to use the $100K toward a new $450K–$500K home, but I’d be looking at a mortgage rate of roughly 6.6%–7%.
So I’m torn between:
1. Put the $100K toward my current mortgage, keep the 2.87% rate, and aggressively pay off the remaining $100K together.
2. Keep the 2.87% mortgage and buy a new $450K–$500K house at 6.6%–7%.
3. Keep the current mortgage and hold/invest the $100K instead of paying down the 2.87% loan.
I know 2.87% is an incredible rate, so part of me feels like I should never give it up. But there’s also something very appealing about starting marriage with a plan to become completely debt-free.
What would you do in this situation? Would you prioritize keeping the 2.87% mortgage, paying it off aggressively, or buying the new house?