# What is your debt load right now? **URL:** \ **Category:** In My Humble Opinion\ **Created:** [December 8, 2009, 11:59pm UTC](https://boards.straightdope.com/t/what-is-your-debt-load-right-now/520534 "2009-12-08T23:59:48Z")\ **Posts on this page:** 20\ **Page:** 3
**Author:** ![groo](https://avatars.discourse-cdn.com/v4/letter/g/ecd19e/32.png) [@groo](https://boards.straightdope.com/u/groo)\ **Post date:** [December 9, 2009, 3:24pm UTC](https://boards.straightdope.com/t/what-is-your-debt-load-right-now/520534/41 "2009-12-09T15:24:59Z")
First, I’d like to say that posts in this thread may not represent a typical cross-selection of society, as the posters are all self-selected. When I had over $76K in non-mortgage debt, I didn’t really sing in the streets telling people about it. So, three years and 78 days ago, I [finally](http://boards.straightdope.com/sdmb/showpost.php?p=7793228&postcount=1) paid everything off, and nowadays, I’m happy to tell anyone who asks (and some who don’t ask) that I’m debt free. Because I cleverly bought a condo at the peak in 1989 and had it foreclosed ten years later, I was not tempted to buy real estate during the recent bubble, so I’m still renting (maybe forever, for all I know) and have a healthy amount of savings, but not so healthy that I don’t worry about money every day. ---
**Author:** ![Athena](https://avatars.discourse-cdn.com/v4/letter/a/35a633/32.png) [@Athena](https://boards.straightdope.com/u/Athena)\ **Post date:** [December 9, 2009, 3:25pm UTC](https://boards.straightdope.com/t/what-is-your-debt-load-right-now/520534/42 "2009-12-09T15:25:07Z")
My mortgage, which is currently at about 2/3 of the value of the house, so I don’t consider that too much of a burden. Nothing, other than that. Oh, we have a few thousand on credit that my husband uses to buy toys (guitars, lately), but he buys & sells them, plus we have enough cash in savings to pay it completely off and still have a bunch left over. We mostly just leave that money on a credit card to remind him that he really doesn’t need 5 guitars (or whatever) because they do cost money. So I don’t really count that as debt, since if we paid it off we’d still be in the black, cash-wise. I don’t like debt, so I don’t get into debt. ---
**Author:** ![Dangerosa](https://avatars.discourse-cdn.com/v4/letter/d/22d042/32.png) [@Dangerosa](https://boards.straightdope.com/u/Dangerosa)\ **Post date:** [December 9, 2009, 3:32pm UTC](https://boards.straightdope.com/t/what-is-your-debt-load-right-now/520534/43 "2009-12-09T15:32:58Z")
> [@CCYMan](#): > > as\_u\_wish, this is nothing against you - you are doing great. But am I missing something here, or is your accountant an idiot? > > He recommends that you continue paying interest on your mortgage debt in order to pay less taxes. But the thing is, you’re going to pay more in interest than you will save in taxes… > > You can itemize mortgage interest as a tax deduction. You will get back from the government a portion of the interest you paid. But it’s only a portion, so keeping your mortgage is costing you more than it’s costing the government. > > Let’s say you paid $5,000 in interest this year, and your tax bracket is 25% (to keep the math manageable). So you can skip paying taxes on 25% of that $5,000, resulting in a $1,250 reduction in taxes you owe this year. But you still paid a net of $3,750 in interest on the loan. If you had paid it off, your tax bill would increase by $1,250, but the amount you spent on interest would have been reduced by $5,000. > > I hear that “tax break” argument from laypeople, but to hear it from an accountant is surprising. Am I right or am I missing something? Well, here is the argument. Let’s say you have $100,000 mortgage at 5% and $100,000 sitting in a savings account in the bank earning nearly nothing. You’ll pay $5,000 in interest, you get (lets say a 25% bracket - all numbers here picked because they are easy) a 1250 deduction and are (3750) Pay the mortgage off and you are out the miniscule interest on the savings account, but save yourself $3750. Lets say you take that $100,000 and instead of getting nothing in a savings account, you put it in Kinder Morgan Partners, having a 7.5% yield. You pay $3,750 in interest, but make $7500 in dividends (on which you pay taxes). Voila, you have leveraged your home and are now several thousand ahead. But now lets say KMP pulls an Enron - and now you are out your $100k - which is why, IMHO, you shouldn’t leverage your house. ---
**Author:** ![StGermain](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/stgermain/32/2868_2.png) [@StGermain](https://boards.straightdope.com/u/StGermain)\ **Post date:** [December 9, 2009, 3:40pm UTC](https://boards.straightdope.com/t/what-is-your-debt-load-right-now/520534/44 "2009-12-09T15:40:12Z")
$45K on my mortgage, with 9 years left on a 15 year fixed at 4.25%. $0 on car, credit cards, or any other 3rd party. StG ---
**Author:** ![ShibbOleth](https://avatars.discourse-cdn.com/v4/letter/s/848f3c/32.png) [@ShibbOleth](https://boards.straightdope.com/u/ShibbOleth)\ **Post date:** [December 9, 2009, 3:41pm UTC](https://boards.straightdope.com/t/what-is-your-debt-load-right-now/520534/45 "2009-12-09T15:41:44Z")
> [@CCYMan](#): > > as\_u\_wish, this is nothing against you - you are doing great. But am I missing something here, or is your accountant an idiot? Not sure about the situation, but isn’t it also possible that the home interest deduction gets him over the standard deduction limit that lets him then deduct other items such as health care costs? Maybe there’s some part of his tax picture we’re not seeing in a few lines. ---
**Author:** ![Hypno-Toad](https://avatars.discourse-cdn.com/v4/letter/h/b2d939/32.png) [@Hypno-Toad](https://boards.straightdope.com/u/Hypno-Toad)\ **Post date:** [December 9, 2009, 4:17pm UTC](https://boards.straightdope.com/t/what-is-your-debt-load-right-now/520534/46 "2009-12-09T16:17:16Z")
I rent so no mortgage. I paid off my car years ago. I pay off my credit cards fully each month. So $0. ---
**Author:** ![HeyHomie](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/heyhomie/32/207_2.png) [@HeyHomie](https://boards.straightdope.com/u/HeyHomie)\ **Post date:** [December 9, 2009, 5:19pm UTC](https://boards.straightdope.com/t/what-is-your-debt-load-right-now/520534/47 "2009-12-09T17:19:01Z")
Mortgage: $21,000 Student Loans: $25,000 Car: $11,000 Cash in pocket: $150ish Money in bank account: $400ish Value of 403(b): in the neighborhood of $10,000; I haven’t checked recently (it hurts too much). Someone else do the math. I’d prefer not to think about it. ☹ ---
**Author:** ![divemaster](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/divemaster/32/78_2.png) [@divemaster](https://boards.straightdope.com/u/divemaster)\ **Post date:** [December 9, 2009, 6:25pm UTC](https://boards.straightdope.com/t/what-is-your-debt-load-right-now/520534/48 "2009-12-09T18:25:36Z")
Mortgage: $360,000 at 4.625% Car: $19,000 but it’s 0 interest for the life of the loan so I don’t consider that real debt. Furniture store: $2,200, but again at 0%, so no reason to pay it off early. That’s it. No other loans; no credit card carry-overs. ---
**Author:** ![MovieMogul](https://avatars.discourse-cdn.com/v4/letter/m/f08c70/32.png) [@MovieMogul](https://boards.straightdope.com/u/MovieMogul)\ **Post date:** [December 9, 2009, 6:29pm UTC](https://boards.straightdope.com/t/what-is-your-debt-load-right-now/520534/49 "2009-12-09T18:29:24Z")
Two mortgages (our house and condo for mother-in-law) that amount to $7K/month. That’s it. ---
**Author:** ![Skammer](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/skammer/32/143_2.png) [@Skammer](https://boards.straightdope.com/u/Skammer)\ **Post date:** [December 9, 2009, 6:32pm UTC](https://boards.straightdope.com/t/what-is-your-debt-load-right-now/520534/50 "2009-12-09T18:32:12Z")
Just our mortgage, which is about $1250/month. We just refinanced a few months ago to get a 15yr loan at 4.625% so we’re in good shape. ---
**Author:** ![mnemosyne](https://avatars.discourse-cdn.com/v4/letter/m/c4cdca/32.png) [@mnemosyne](https://boards.straightdope.com/u/mnemosyne)\ **Post date:** [December 9, 2009, 6:42pm UTC](https://boards.straightdope.com/t/what-is-your-debt-load-right-now/520534/51 "2009-12-09T18:42:50Z")
About 50$ on a credit card, with more than enough money in the bank to cover it. I always pay month-to-month. We currently don’t have anything on monthly payment plans, since our last furniture bill has been paid off. We rent, and own both cars outright. My husband makes enough money to help me pay for school, so I don’t have any loans, and never have. ---
**Author:** ![Cat\_Whisperer](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/cat_whisperer/32/4839_2.png) [@Cat\_Whisperer](https://boards.straightdope.com/u/Cat_Whisperer)\ **Post date:** [December 9, 2009, 6:49pm UTC](https://boards.straightdope.com/t/what-is-your-debt-load-right-now/520534/52 "2009-12-09T18:49:11Z")
> [@Hokkaido\_Brit](#): > > \ > I’d like to get back to doing this but my husband says we’d be better to save the money (at 0.5% interest or less - bleh) because you can’t get it back out of the house if there’s an emergency, and if he dies suddenly we’ll have lost all that money we needn’t have paid. > > Now I’m in a quandary. I thought I was doing a good thing. I thought it would cut our mortgage payments when we are old and have a lot less income than now. > > What say you, experts??! Unless you’re getting some kind of mortgage tax break like US Americans get (we don’t get those tax breaks in Canada), I’d pay it off as soon as possible. Part of my retirement planning is living in a mortgage-free house (possibly even looking at a reverse mortgage since we have no kids, but I’m quite wary about those). You can get money back out of your home - it’s called a home equity loan. It’s not my preferred way to go if you can help it, though - you get a little money, the bank gets your house if you default. I would (and did) go for an unsecured line of credit before I’d go the home equity route. Your husband isn’t _wrong_ about the life insurance on the mortgage, but he isn’t completely right, either. I don’t think making insurance part of your financial planning is sound. He might live to a 110; then you’ll wish you’d paid off the mortgage. What about his financial burden, too, if you die? Then he’s paying off the mortgage without you. My gut says debt is bad, and pay it off as soon as possible. ---
**Author:** ![Kayeby](https://avatars.discourse-cdn.com/v4/letter/k/9de0a6/32.png) [@Kayeby](https://boards.straightdope.com/u/Kayeby)\ **Post date:** [December 9, 2009, 10:07pm UTC](https://boards.straightdope.com/t/what-is-your-debt-load-right-now/520534/53 "2009-12-09T22:07:04Z")
$240k on the mortgage (will be down to $100kish at the end of this year though, putting us on track to pay it off by 32 - earlier if we’re really dilligent) $370k on the investment property, which pays for itself So $610k in debt between me and my husband. Sell the properties and we’re up about $350k (though homeless) ---
**Author:** ![iamthewalrus\_3](https://avatars.discourse-cdn.com/v4/letter/i/258eb7/32.png) [@iamthewalrus\_3](https://boards.straightdope.com/u/iamthewalrus_3)\ **Post date:** [December 9, 2009, 10:11pm UTC](https://boards.straightdope.com/t/what-is-your-debt-load-right-now/520534/54 "2009-12-09T22:11:51Z")
$800 and change remaining school loans. There’s probably a few hundred on the credit card, but I pay it off every month, so I consider it more like a charge card than “debt”. ---
**Author:** ![Tom\_Tildrum](https://avatars.discourse-cdn.com/v4/letter/t/e95f7d/32.png) [@Tom\_Tildrum](https://boards.straightdope.com/u/Tom_Tildrum)\ **Post date:** [December 9, 2009, 10:35pm UTC](https://boards.straightdope.com/t/what-is-your-debt-load-right-now/520534/55 "2009-12-09T22:35:04Z")
> [@Cat\_Whisperer](#): > > You can get money back out of your home - it’s called a home equity loan. It’s not my preferred way to go if you can help it, though - you get a little money, the bank gets your house if you default. I would (and did) go for an unsecured line of credit before I’d go the home equity route. Won’t the bank go after your house (among any other assets) if you default on the LOC? ---
**Author:** ![Hokkaido\_Brit](https://avatars.discourse-cdn.com/v4/letter/h/d26b3c/32.png) [@Hokkaido\_Brit](https://boards.straightdope.com/u/Hokkaido_Brit)\ **Post date:** [December 9, 2009, 11:33pm UTC](https://boards.straightdope.com/t/what-is-your-debt-load-right-now/520534/56 "2009-12-09T23:33:43Z")
> [@Cat\_Whisperer](#): > > Unless you’re getting some kind of mortgage tax break like US Americans get (we don’t get those tax breaks in Canada), I’d pay it off as soon as possible. Part of my retirement planning is living in a mortgage-free house (possibly even looking at a reverse mortgage since we have no kids, but I’m quite wary about those). > > You can get money back out of your home - it’s called a home equity loan. It’s not my preferred way to go if you can help it, though - you get a little money, the bank gets your house if you default. I would (and did) go for an unsecured line of credit before I’d go the home equity route. > > Your husband isn’t _wrong_ about the life insurance on the mortgage, but he isn’t completely right, either. I don’t think making insurance part of your financial planning is sound. He might live to a 110; then you’ll wish you’d paid off the mortgage. What about his financial burden, too, if you die? Then he’s paying off the mortgage without you. My gut says debt is bad, and pay it off as soon as possible. I don’t think there are any tax breaks for owning your own home here. I know you get penalised by work if you are a public servant - rented housing is slightly subsidised but the minute you buy the subsidy is cancelled. I have life insurance unconnected to the house, so I suppose he’d have to use that to pay down the loan to a more manageable level. He does get a big payout when he retires and the plan is (on his side) to use half the money to pay down a large part of the remaining debt so that the final years of repayment are very small, but then if he can’t get another job (retirement is TOO early in Japan and people have to scramble for low paying part time jobs to make ends meet… Don’t get me started.) then how will we live?? Another truly frightening thing is that houses in Japan do not hold their value but depreciate like a car. After about ten years the house has no resale value at all, no matter what work you have done on it. Only the land holds value, IF you live in an area that is likely to remain popular. Sigh… It’s all very complicated and alien to what I learned in England. ---
**Author:** ![Maastricht](https://avatars.discourse-cdn.com/v4/letter/m/a88e57/32.png) [@Maastricht](https://boards.straightdope.com/u/Maastricht)\ **Post date:** [December 9, 2009, 11:46pm UTC](https://boards.straightdope.com/t/what-is-your-debt-load-right-now/520534/57 "2009-12-09T23:46:56Z")
210 k mortgage, at 800 euro’s a month. Hubby has to pay off 80 bucks a month student loan. Otherwise, no debt. I got 30.000 savings, but they’re all in stock, so the value might go up and down. Hubby got in our marriage with 8 k in consumer debt, but he paid it all off these past five years. ---
**Author:** ![Cat\_Whisperer](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/cat_whisperer/32/4839_2.png) [@Cat\_Whisperer](https://boards.straightdope.com/u/Cat_Whisperer)\ **Post date:** [December 10, 2009, 2:23am UTC](https://boards.straightdope.com/t/what-is-your-debt-load-right-now/520534/58 "2009-12-10T02:23:05Z")
> [@Tom\_Tildrum](#): > > Won’t the bank go after your house (among any other assets) if you default on the LOC? I don’t think so; it’s an unsecured loan, like a credit card. It’s not tied to our home equity or anything like that. Now you’ve got me wondering. ---
**Author:** ![Dangerosa](https://avatars.discourse-cdn.com/v4/letter/d/22d042/32.png) [@Dangerosa](https://boards.straightdope.com/u/Dangerosa)\ **Post date:** [December 10, 2009, 2:38am UTC](https://boards.straightdope.com/t/what-is-your-debt-load-right-now/520534/59 "2009-12-10T02:38:12Z")
A home equity loan or a line of credit against your house is secured by your house. They can go after it. That’s why you usually get a better interest rate than with an unsecured loan. And why you can write off the interest on your taxes. ---
**Author:** ![ToeJam](https://avatars.discourse-cdn.com/v4/letter/t/dfb087/32.png) [@ToeJam](https://boards.straightdope.com/u/ToeJam)\ **Post date:** [December 10, 2009, 2:45am UTC](https://boards.straightdope.com/t/what-is-your-debt-load-right-now/520534/60 "2009-12-10T02:45:25Z")
if I had to guess, I’d say about $250k in debt to Student Loans and various such things. Trying not to think about it for another 2 years while in school. [Previous page](https://boards.straightdope.com/t/what-is-your-debt-load-right-now/520534.md?page=2) [Next page](https://boards.straightdope.com/t/what-is-your-debt-load-right-now/520534.md?page=4)