Man Overboard

Hi Barefoot,

Last August my husband bought a boat without telling me, and put it all on finance. After wanting to throw him to the sharks, I have come to terms with this liability (B.O.A.T. — Bring On Another Thousand). We are both 47 and earn $150,000 combined. I bought him your book for Christmas and finally we are on the same page as far as money goes. It is a five-year loan at 8.97 per cent (total cost $37,000). My question is, would it be worth it rolling it into the home loan and pay extra on the mortgage? Our mortgage rate is 3.99 per cent, and the penalty to pay the boat out early is $400. 

Mary

Hi Mary

That’s really … strange.

“Hi honey, I’m home! On the way back from the fish ’n’ chip shop I picked up a $30k boat!”

Anyway, the answer to your question is yes, you should roll the boat debt over to your mortgage. However, you need to understand that you’re taking a fixed-term five-year loan and spreading it over a 30-year mortgage, which means you’ll pay less per month but will end up paying a lot more in the end!

So, a word of advice: if your husband comes back from the shops with a jetski, you need to grab him by the fishing tackle and lure him in quick. Keep him on the hook, Mary.

Scott