Paying off mortgage now that SALT deductions limit to 10K

[DeniseNJ]

Used to be you'd itemize and deduct your state income, property tax, and mortgage interest. for me that was like 35K.  Now that SALT deductions (2 states and property tax) are limited to 10K (out of what was really about 25K), my mortgage interest, SALT, and small other deductions were only 22K so under the standard deduction so no need to itemize.  I would get the same standard deduction even if I had no mortage interest (or property tax), making my mortgage interest no longer tax deductable.

Makes me want to pay off the house asap.  Is anyone changing their view on paying off mortgage now?  This is limited I guess to high SALT states--I live in NJ and work in NYC and ended paying quite a bit more in federal tax.

[YttriumNitrate]

Makes me want to pay off the house asap.  Is anyone changing their view on paying off mortgage now?  This is limited I guess to high SALT states--I live in NJ and work in NYC and ended paying quite a bit more in federal tax.

With the SALT deductions going away, I'm guessing your effective interest rate went from the high-two percents to mid-three percent for a 30-year fixed. Risk free FDIC insured bank accounts are now paying low-to-mid 2%, so even through your effective rate went up a tad I still wouldn't pay off the loan early.

For what it's worth, a decade ago my house had a 5.125% loan, I didn't meet the threshold for itemizing, and I still didn't pay off the loan early. With the benefit of hindsight, and can say for certain that was the right move.

[NathanP]

Moving to a new state Paying off mortgage now that SALT deductions limit to 10K

Changed it for you :)

[DeniseNJ]

Moving to a new state Paying off mortgage now that SALT deductions limit to 10K

Changed it for you :)

Oh heck yeah!  Can't right now but that's definitely part of the plan.