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Financial question:

My home is estimated to be worth 630k, I owe 327k, 2.99% fixed 26 years left. If I borrow 177k of the equity at 8.5% over 15 years (leaving 20% equity in the home), and buy btc today, it seems like projections say I could sell the btc at some point in the future (1-5 years) and payoff both the primary and equity loan.

I know the mantra, stay humble and stack sats. And the inherent mantra, never sell btc. And I know I could get rekt if btc drops and doesn't recover in the next 5 years. But, I have the extra income to cover the equity payments now, and I've got the stomach toaggressive? (traded options for amseveral years).

Am I being too aggressive?

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Discussion

Keith 10mo ago

1. Do you have six months of reserve cash? Always have a reserve.

2. Do you have any debt besides your mortgage? Car payment, credit cards, student loans? Pay off any debt and have a reserve before even considering other options.

3. 2.99% is lower than the inflation rate. You are basically arbitraging the dollar and making money off this loan. You will pay $136K in interest on a $177K HELOC if you carry the loan to term. If you sell the home and buy another you are looking at transaction costs of $60K to $70K. Also remember, that as the price of your home increases so does the price of other homes. Did you factor in the increased cost of purchasing a new home?

4. The payment on the HELOC will be approximately $1800/month, $21,600/year, $108K/5 years. With about $60K going towards interest and about $36K going towards principal during the first 5 years. Plus the cost of obtaining the loan. Even “no cost” loans cost something.

If my math is correct you are looking around at least $130K in cost, or around 73% cost to borrow today what you could stack in about 8 years. Not counting your current DCA and buying more during dips.

This isn’t about risk tolerance, your idea is just a bad investment.

Michael S Wildcard ✨ 😶‍🌫️🗽⚡ 8mo ago

Why trade an asset that is appreciating at 29% or more per year to pay off a loan that requires depreciating fiat to service.

Also a heloc will be significantly higher in interest. Either way I have no plans on paying ours off early. Maybe one day we'll have hyperinflation and a 1 billion dollar bill will take care of it. Lol