Live in VHLOC area and own a TH. I was able to lock down a 2.9% rate 5 years ago (so another 25 years to pay it off). I know borrowing at such a low rate is like free money, but it is going to be a major hurdle for my FIRE journey.
The mortgage itself (not including insurance and tax) is ~40K, which makes it impossible for me to keep my MAGI lower than 400% FPL (63K in my case). I am among the ones that suffer the most next year from the subsidy cliff.
Mortgage stops me from lowering MAGI to 400% FPL (so my ACA premium will skyrocket next year), should I pay it off? My rate is only 2.9%
byu/Sufficient-Party-385 infinancialindependence
Posted by Sufficient-Party-385
4 Comments
>but it is going to be a major hurdle for my FIRE journey
If you are not planning to FIRE in the near future there are two things to keep in mind:
– rules can change
– 400% FPL is likely to increase steadily over time (inflation), your mortgage will not
You need to provide actual numbers in order for anyone to have any ability to advise you. What is your estimated 2026 MAGI? What is your household size? What are your assets? What zip code/county do you live in?
These are all required pieces of information for anyone to be able to potentially help you.
>The mortgage itself (not including insurance and tax) is ~40K,
> I am among the ones that suffer the most next year
Let’s start by calming down on the verbiage of suffering….
You can also try making lumpy withdrawals. Pull out 3 years worth, push that into a CD ladder. Pay the high taxes and insurance that year. Then have a low magi just below the limit for the next 4-5 years. You’ll have to do the math and make some educated guesses and balance your risk/reward though.