Hey everyone! This is my first post, and I cannot honestly say that I'm a mustachian yet. I'm working my way towards it, but I'm not there yet.
I live in a Duplex that I own both sides of. I love it, it allows me to live in a nice neighborhood for about $300/month in mortgage/insurance/interest costs. Its an older place though, and the neighborhood is improving. Seeing that my house was one of the uglier houses on the block, I decided to do some improvements to see if I can get more rental income with the next tenants. I replaced the roof, renovated a bathroom, and upgraded the HVAC to ducted units (from window units).
The HVAC was done by a contractor, and due to the unusual layout of the home, it cost more than I expected it to. The installer said, "no worries, we've got 12 months/0% financing, take a year to pay it off" I said, "Awesome! Proceed with the work!". (OBVIOUSLY not a mustachian yet...) During the installation, the sales guy came by with the papers to sign, and I got a look at the loan documents. The loan is a bit of a clusterfuck, and I wouldn't have signed it except for the fact that they'd already cut holes in my floor and run half the ducting. Here are the terms:
Principle: $12400
Rate: 17.99 <--- NOT 0%
Term: 48 months
If I pay it off before 12 months goes by, I get a refund of all of the interest I've paid. Basically, I've got until October to pay it off, or I can continue paying for the remainder of the loan term at 17.99%.
I've got the savings to cover it, and also a giant tax return coming (due to depreciating all that capex). Should I pay it off now, or wait till October? The opportunity cost of waiting (around $1900 in interest tied up for 9 months) doesn't seem that high.