[Sohcahtoa82]

> I loved my super high-interest loan. It meant that my most of my housing payment was tax-deductible, and that's fantastic.

Absolutely insane.

I guarantee that the tax deduction did not offset the extra interest you paid and that overall, it's a net loss for you.

The deduction reduces your taxable income, it does not reduce your tax directly. If you paid $30,000 in interest, it might reduce your tax by ~$10,000, so you're still down $20,000. Meanwhile, if you had half the interest rate, you might pay $15,000 in interest, reducing your tax by ~$5,000, so you're only down by $10,000.

And that doesn't even get into how the standard deduction works, which you can't take if you itemize so you can take the mortgage interest deduction.

I don't think there's a single scenario where choosing to spend more money than you otherwise would just for tax benefits results in a net positive.

[abalashov]

It's absolutely a net loss, but the $55k deficiency when I walked away was worse. However, I realise that this was an artifact of the recession.

Less flippantly: I look at it as a question of government distorting the housing market with tax policy, and whether to have a deductible housing payment or not. Any conceivable appreciation is perhaps a bonus, but I truly don't care.

Re: standard deduction -- it wasn't then what it is today, post-Trump tax cuts.