Okay, a retirement financing type question.
We bought a flat in Scotland for our son to live in while he's in school. He may live and work there another couple of years after as well (although once he's working, he'll pay us rent). Already has a flatmate paying rent (kind of a reduced rate, as it's his best friend). We took out a mortgage in the UK (denominated in pounds) - it's not huge, say $200k to work with example round numbers.
Two new factors: (1) the mortgage had an adjustable rate after 2 years, so it's now gone up about 2.4%, and (2) I've got a chunk of money from my dad's estate.
The plan is obviously to take as much as we can from my dad's estate and invest to build up more for retirement. But this flat is part of our retirement plan -- we can earn a decent cashflow from it renting it out to students (yes, we'll pay taxes in the UK on that income, but it's not a lot as our UK earnings will just be that rental income). Say we can both yield $20k a year long-term renting it out, AND stop paying around $20k a year in mortgage payments now if we just pay it off.
So, the question is....do we (1) re-fi the mortgage for another 2-3 years at 4.5%, or (2) pay it off with cash from the estate, thus taking that mortgage payment off our plate, parking some money/value in the UK (denominated in pounds, with the pound getting stronger v the dollar every damned day it seems), and then have it free and clear? Remembering of course that it's real property, and part of our retirement planning portfolio. With, you know, maybe a long-term plan being to rent it out only to exchange students for the academic year, then it's vacant during the summer, so we can spend summers over there in a much more hospitable climate.