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Is It Better to Have Student Loans or a Mortgage?

My wife and I owe over $150,000 in student debt with interest rates around 9-11% on each loan. Is it better to just refinance our house and pay it all off, for a lower monthly payment and interest rate?


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8 Responses to "Is It Better to Have Student Loans or a Mortgage?"

  1. Sarah K says:
    Egad, that’s the highest interest rate I’ve seen on student loans ever! I’d suggest refinancing your student loans if at all possible. I wouldn’t want to risk a home that’s paid off over student loan debts that, at worst, will be garnished from your wages.
  2. Beach Bum says:
    I would say student loans, but it could work either way. You have the option to write off your mortgage interest if you have a mortgage loan, but typically you can get a student loan consolidation at a good rate and sometimes even interest deferred. I got my student loans at 3.5%. If the best you can do is 9-11 the mortgage may look more attractive, but the interest is computed differently so you might end up paying longer.
  3. Tally says:
    It’s tax deductible on the mortgage, so refi. Refi with a fixed rate, don’t do an ARM.
  4. cactusone says:
    mortgage earns equity and retains value
  5. Lisa says:
    Read the find print, if you refinance! People are losing their houses over “teaser” rates.
  6. ik ben alphabetsoup says:
    refi student loans… go with whatever gives you the lowest interest rate.. hands down
  7. rhsaunders says:
    Pay off the student loans. You should be able to get a mortgage at around 6.25% these days. The student loan rates are outrageous; how did you manage to get loans with rates that high?
  8. manns41078 says:
    Student loan interest is also tax deductible
    I would shop around for some student loan consolidation companies.
    You should be able to get something around 5% for student loans (check Bank of America or other large lenders).

    On one hand student loans are unsecured debt which is a fairly high liability in the eyes of some financial institutions.
    But many don’t look at it that way because usually at worst they will garnish your wages for a pretty low amount.

    On the other hand having little equity in your home can be dangerous too.

    My preference would be keep the student loans, but search for a consolidator with lower rates.
    9-11% is just robbery.

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