[quote=xgliu128]without hitting AMT, I might think paying off mello roos might not be good based on some simple calculation. say 6K annual payment, pay-off amount is 10x, that is 60K, interest rate is 4%. 60K can become about 120K in 20 years. 6K annual payment with tax benefit will become about 4K annual payment. in 20 years, i will pay 80K total, still less than 120K.
but i agree long term uncertainty is another big factor…[/quote]
I would not do it just for long term uncertainty. How realistic is it that you’ll still be at the same house 30 years from now?
I agree with your calculation. Except to say most folks on the hook for a $6k MR generally have the income that pretty much guarantee they’ll be on the hook for AMT yearly as well. Unless you are one of the lucky few that can deduct most of it away.
