A lot of interesting info in this thread and enjoyed all the info on CFD bonds.
I think a lot of people don’t pay them off because, for 1, they don’t have the cash, 2) they rather just keep the cash themselves since no one knows what will happen and if they will stay in the home long term.
If you are very wealthy, it’s worth considering, but some downsides I see is that you would lose the tax break that everyone is taking when paying these yearly. The tax break is pretty big for high income folks (45%?) Another thing is the time value of money. $5000 30 years from now even if increased 2% a year is not the same as $5000 today which is worth a lot more.
There’s little to no inflation now (according to the fed, but tons of inflation in things like education/healthcare, etc…)…
That said, similar to a mortgage, the CFD could be worth a lot in saving high income people a lot of taxes and if inflation were to come back, the mortgage and the CFDs won’t be as bad in 20-40 years neither.
All that said, you really have to just do the math to see if it makes sense for your situation.
No plans to pay here since we don’t have the money and could use more funds for business instead.
