Is Owning a Home Really a Tax Savings?

Author

Najma Zanelli
September 30, 2025

In partnership with

Startups who switch to Intercom can save up to $12,000/year

Startups who read beehiiv can receive a 90% discount on Intercom's AI-first customer service platform, plus Fin—the #1 AI agent for customer service—free for a full year.

That's like having a full-time human support agent at no cost.

What’s included?

  • 6 Advanced Seats

  • Fin Copilot for free

  • 300 Fin Resolutions per month

Who’s eligible?

Intercom’s program is for high-growth, high-potential companies that are:

  • Up to series A (including A)

  • Currently not an Intercom customer

  • Up to 15 employees

Welcome back to Live Rich, Retire Rich. I’m so glad you’re here. Each week, we bring you guidance for real-life money choices designed to help you move with confidence. Today, we’re unpacking the housing decisions so many of you are weighing right now, with a calm, practical lens and zero hype.

Everyone’s watching mortgage rates like they’re the only headline that matters. They’re not. Rates are one line on a very long ledger. If you fixate on a single metric, you can make a “great rate” decision that is a terrible total cost decision.

Translation: Your wealth outcomes hinge on all-in cost and time horizon, not just the APR on your paperwork.

Three Costly Assumptions (and the Truth)

1) “My mortgage gives me a big tax break.”

Truth: Many households take the standard deduction—meaning your mortgage interest may give you no additional tax benefit at all. Even if you itemize, the “savings” are only your mortgage interest × your marginal tax rate, and it’s subject to limits. Don’t buy more house than you can afford today based on a theoretical refund tomorrow.

Power Move:

  • Run your taxes both ways (itemize vs. standard). If you’d still take the standard deduction, assume $0 mortgage-interest benefit in your math.

2) “Refinancing always saves money.”

Truth: If you restart the 30-year clock, you may lower your monthly payment while increasing the lifetime interest you’ll pay—especially after fees. Cheaper cash flow can still be expensive wealth.

Power Move (the refi rule of three):

  1. Breakeven = closing costs ÷ monthly savings. If you won’t keep the loan beyond that number of months, skip it.

  2. Ask for a same-remaining-term quote (e.g., turn 22 years left into a 22-year, 20-year, or 15-year refi) so you don’t add years back.

  3. Compare refinance costs to alternatives: using that money for principal reduction, paying off high-interest debt, or boosting your emergency fund.

3) “If I can swing the mortgage, I can afford the house.”

Truth: The mortgage is the cover; the book is TCO—Total Cost of Ownership. That includes:

  • Property taxes (often reset higher after a sale),

  • Insurance (premiums have climbed in many regions; check before you bid),

  • HOA/condo fees (and surprise assessments),

  • Maintenance & capital expenses (plan 1%–2% of home value per year),

  • Utilities & commuting (bigger spaces, longer drives = real dollars).

Power Move:
Your all-in housing cost must leave room for retirement contributions, emergency savings, and eliminating high-interest debt. If a home suffocates your investing, you’re financing square footage with your future.

Buy / Refi / Sell: The Decision Framework

A) Considering a Purchase?

  • Cash Cushion First: Six months of living expenses in an accessible account.

  • Stress-Test the Payment: Would this still work if taxes/insurance rise 15% and rates don’t fall for 24 months? If the test breaks your budget, the deal isn’t a fit—yet.

  • Price Before Emotion: Set your “walk-away” price before showings. If a lender pre-approves you for more, smile and stick to your number.

  • Negotiate the Invisible: Credits for repairs, seller-paid points, closing-cost assistance, and a longer inspection window are real levers. Use them.

B) Considering a Refi?

  • Why now? Clarify your goal: lower lifetime interest, faster payoff, or monthly cash-flow relief. Pick one primary outcome.

  • Term Discipline: If a refi adds years, require that lifetime interest still declines materially. If not, redirect your plan: keep your loan and set up an automatic principal prepayment equal to the refi “savings.”

  • Cost Audit: Compare “refi + costs” vs. “no refi + extra principal + debt payoff elsewhere.” Choose the path that wins on five-year and lifetime math.

C) Considering a Sale?

  • Transaction Costs Are Real: Agent commissions, transfer taxes, prep, and moving can erode your proceeds.

  • Rent vs. Buy Bridge: If your next buy would overextend you, a strategic rental period can be the wealth move—stack cash, improve credit, wait for the right property (not just the right rate).

Money • Relationships • Spiritual Abundance (MRS in Practice)

  • Money: Lead with math, not mood. All-in cost and time horizon are your compass.

  • Relationships: Don’t “buy to belong.” Pressure from family, friends, or social feeds is the most expensive approval you’ll ever purchase. Align the home to your actual life, not someone else’s highlight reel.

  • Spiritual Abundance: Peace is a line item. If owning will steal your sleep, generosity, or presence with your kids, press pause. A home should expand your life, not compress it.

The 60-Minute Housing Clarity Session (Do this this week)

Minutes 0–10: Snapshot
List: cash cushion, monthly surplus/shortfall, credit score, current rent or mortgage, and any high-interest debt.

Minutes 10–25: True Monthly Payment
For each property or refi scenario, compute:
PITI + HOA + (Home value × 1%–2% ÷ 12) = realistic monthly.
If that number crowds out retirement and emergency savings, it’s a “no” for now.

Minutes 25–40: Best-Case vs. Worst-Case

  • Best-case: modest tax benefit, stable insurance, small HOA increases.

  • Worst-case: no tax benefit, +20% insurance/taxes in year one, one major repair in year two.
    If you can’t handle the worst-case without panic, scale back or wait.

Minutes 40–60: Your One Next Move
Pick one: increase down payment target, boost credit, add a second income stream, or negotiate a better purchase/closing structure. Calendar it. Action beats anxiety.

Example Scenarios (Simple Numbers, Big Lessons)

Scenario 1 — “Lower Payment, Higher Cost”

  • You refi from 5.00% with 22 years left into 30 years at 4.75%. Payment drops $180/month. Closing costs: $6,000.

  • Breakeven: 6,000 ÷ 180 ≈ 33 months. If you’ll sell or refi again before month 34, you lose. If you keep it, check lifetime interest: adding eight years often wipes out the small rate improvement.

  • LRRR Move: Either request a 20-year refi or keep your current loan and auto-add $180 to principal. You get the payoff speed without new fees.

Scenario 2 — “The Invisible $400”

  • Home price: $500,000. Mortgage P&I fits your budget.

  • After purchase: taxes reassessed +$150/mo, insurance +$120/mo, HOA +$60/mo, maintenance reserve (1%/yr) ≈ $417/mo.

    Total invisible add-on: ~$747/mo.

  • LRRR Move: If this crowds out investing, drop your target price or increase down payment. Wealth > wow-factor.

Scripts & Checklists You Can Use Today

Boundary Script with Your Agent/Lender

“I’m optimizing for all-in monthly cost and lifetime interest. Please show options that preserve my retirement contributions and six-month cash cushion. If a scenario compromises either, it’s a pass.”

Insurance Reality Check (Before You Bid)

  • Quote homeowners + wind/hail + flood (where relevant) on the exact address.

  • Ask the seller for prior claims and age of roof, HVAC, and major systems.

  • If premiums surprise you, that’s a pricing lever—or a sign to walk.

Walk-Away Payment
Write your maximum all-in monthly housing number (PITI + HOA + 1%/yr ÷ 12). Share it with your partner and your agent. Treat it like oxygen—non-negotiable.

Closing

If today’s issue did its job, you’re feeling calmer, clearer, and a little more uncompromising about what truly serves your life. You don’t need to predict rates or chase headlines. You need clean math, honest context, and the courage to choose the scenario that protects your future and your peace.

Make one decision before the day ends—run the all-in housing math, set your walk-away payment, or schedule the conversation that moves money forward. Small, deliberate steps compound. Optionality is wealth.


With care and conviction,
Najma Zanelli
Book A Private Call
Explore Offerings
Founder, NAZ Global Consultancy
Follow me on IG: @najma_zanelli
Email: [email protected]

Reply

or to participate.