Room for Leah's mother.
What the new rate costs.
A home with a main-floor suite means Leah's mother can move in with you. Your 3.25% loan can't come along, so the move means borrowing again near 7%. Pick a financing strategy and adjust the price to see the effect on monthly housing cost, yearly savings, the brokerage trust and cash reserves, and net worth, compared with staying at Linden Court.
Net worth, move vs. stay
The new home
Extra down payment
Timing & refinancing
Monthly, today vs. after the move
The move, in dollars
Bigger home vs. higher rate
This splits the monthly increase into two parts: the cost of buying a larger home, priced at their current 3.25% rate, and the extra cost of today's higher rate. Figures are after the federal tax benefit, for the selected strategy.
If rates were different
Same loan and strategy, repriced at each rate. No points, no refinance.
Same price and assumptions for every row. No points and no refinancing, so the comparison stays clean. Horizon: years.
Assumptions
Borrow less, keep it fixed
For a home they plan to stay in, we recommend a 30-year fixed with no points. The down payment is the Linden Court equity plus stablecoin and bank cash above a $160K reserve. If the loan would still top $750K, use part of the brokerage trust account to bring it down.
| Decision | Why |
|---|---|
| 30-year fixed | Keeps the required payment low while cash flow is near break-even. They can still prepay whenever they like. |
| No points | A refinance within 5 to 7 years would forfeit what they paid. |
| Spare cash to the loan | About 2.75% after tax on stablecoins, versus about 4.8% after tax saved on deductible mortgage interest. |
| Loan at or below $750K | Interest above $750K isn't deductible and costs the full 7.03%, more than the expected return on the portfolio. |
| Brokerage otherwise stays invested | Below $750K, the after-tax loan cost is under the expected return, and the account stays liquid. |
| Bridge only if needed | Use it only to win a non-contingent offer. It adds months of carrying both homes. |
What to keep in mind
- The 3.25% loan isn't portable. The original balance works out to exactly $510,400, the 2020 conforming limit, which points to a conventional Fannie Mae or Freddie Mac loan with a due-on-sale clause. Page 4 of the 2020 Closing Disclosure will confirm it.
- Every dollar of down payment earns the mortgage rate, guaranteed. Moving stablecoins into the house replaces roughly 2.75% after tax with 7.03% of interest avoided. The trade-off is a thinner reserve, so the reserve floor is flagged.
- A bridge loan buys convenience, not savings. It lets them skip the sale contingency, but they carry both homes plus margin interest until Linden Court closes. Margin is variable and can be called if markets drop, so keep it to about 30% of the account.
- For a long hold, a fixed rate beats an ARM, and a refinance is the way to capture any drop in rates. Points only pay off if they don't refinance within about 5 to 7 years.
- Title the new home in the family's revocable trust at closing, like Linden Court, so the estate plan stays whole.