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Is Owning a Home Really a Tax Savings? · Suze Orman's Women & Money (And Everyone Smart Enough To Listen)

• 0:07
  Suze: September 21, 2025. Welcome everybody to the Women and Money
• 0:12
  Suze: podcast as well as everybody smart enough to listen, in
• 0:17
  Suze: today's Suze School, so simply get out your Suze notebooks.
• 0:23
  Suze: I know you're going to be sad. KT's not here
• 0:26
  Suze: with me. KT's actually out with Colo wahooing, believe it
• 0:31
  Suze: or not. You always do it very first thing in
• 0:34
  Suze: the morning. And so anyway, I hear they've already caught three,
• 0:39
  Suze: but that is besides the point.
• 0:42
  Suze: KT on Thursday said Suze, do a Suze School on
• 0:45
  Suze: real estate, and I was like, really?
• 0:48
  Suze: And then I thought, OK, she's always right, so what
• 0:52
  Suze: could I tell you about real estate that would make
• 0:55
  Suze: sense to you and really help you? And real estate
• 0:59
  Suze: obviously in most cases also come with a mortgage, and
• 1:04
  Suze: a lot of you are hearing, all right, interest rates
• 1:08
  Suze: may go down. You have been waiting for interest rates
• 1:10
  Suze: to go down to buy. You've also been waiting for
• 1:14
  Suze: interest rates to go down to possibly sell
• 1:18
  Suze: what you have because you want to buy another piece
• 1:22
  Suze: of real estate, but you don't want to go from
• 1:24
  Suze: a 2 or 3% mortgage rate to a 5 or 6%,
• 1:28
  Suze: so you're still waiting. Everybody's waiting for interest rates to
• 1:33
  Suze: come down, but there's more to buying a home than
• 1:38
  Suze: just the interest rate on the mortgage. So I'm gonna
• 1:43
  Suze: get to that in one second, however.
• 1:47
  Suze: I have to talk about the stock market. Stock market's
• 1:51
  Suze: doing exactly what we wanted it to do. We didn't
• 1:55
  Suze: know if it was going to go up, was it
• 1:56
  Suze: going to go down, what was going to do, but
• 1:58
  Suze: we said overall...
• 2:01
  Suze: the market will probably be good next year. It should
• 2:04
  Suze: be even better. So hopefully you are investing again if
• 2:08
  Suze: you don't know what to invest in, just simply dollar
• 2:12
  Suze: cost average into the ETF VOO, and that is the
• 2:17
  Suze: Standard and Poor's 500 index ETF. And yes, I still
• 2:21
  Suze: like VTI and spiders, but right now I'm favoring,
• 2:27
  Suze: VOO. It doesn't mean you have to switch to it.
• 2:31
  Suze: Just know that. Also, I'm sure many of you are
• 2:35
  Suze: incredibly over the top when it comes to two stocks,
• 2:40
  Suze: IONQ and Palantir, and you're probably all wondering.
• 2:46
  Suze: Have they gone too high? Should I continue to dollar
• 2:49
  Suze: cost averaging to them? What should I do? Well, I
• 2:54
  Suze: went to Mister Keith Fitz-Gerald, and I went, Keith, do
• 2:58
  Suze: you think they're too high? Do you think that people
• 3:01
  Suze: shouldn't be buying in? And Keith Fitz-Gerald said, No, Suze,
• 3:06
  Suze: are you crazy? I really, really think that over the years,
• 3:11
  Suze: maybe 5 years from now, could see Palantir at 500.
• 3:16
  Suze: Also, you could see IONQ that's right around 70 easily
• 3:21
  Suze: at 121 in some period of time, so Keith does
• 3:26
  Suze: not think they're at their high and therefore you should,
• 3:31
  Suze: in his opinion, continue to dollar cost average into them.
• 3:36
  Suze: So I'm sure if you bought them you are really,
• 3:40
  Suze: really happy.
• 3:41
  Suze: But you're also probably really happy if you bought any
• 3:45
  Suze: AI stock. And again,
• 3:48
  Suze: take a look at Apple. I know a lot of
• 3:51
  Suze: you don't like Apple. A lot of you think, Oh,
• 3:54
  Suze: I don't like their iPhones. Just take a look, and
• 3:57
  Suze: if it happens to drop, you might want to start
• 4:00
  Suze: to add that to your list as well of purchases.
• 4:06
  Suze: With that said, Bitcoin is still just fine, gold is
• 4:11
  Suze: just fine still, and interest rates on bonds, you are
• 4:16
  Suze: starting to see them come down, which is also fine.
• 4:21
  Suze: Let's go to Suze School now and talk about real
• 4:26
  Suze: estate and refinancing.
• 4:29
  Suze: Do you have your notebooks out? OK, cause here we go.
• 4:34
  Suze: Just last week, the Feds lowered the Fed funds rate
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  Suze: 25 basis points from 425 - 450, which is where
• 4:43
  Suze: they were, to 4 to 425, and that was their first
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  Suze: cut since December of 2024, and they expect to do
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  Suze: two more cuts. So the Fed funds rate will affect
• 4:57
  Suze: the interest rate that you're getting paid on money market accounts,
• 5:01
  Suze: savings accounts, it will affect what the interest that you're
• 5:05
  Suze: paying on credit cards, those should start to come down
• 5:10
  Suze: little by little, OK, but when it comes to real estate,
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  Suze: mortgages are not attached to the Fed funds rate.
• 5:21
  Suze: They are attached to the 10 year Treasury. The 10
• 5:27
  Suze: year Treasury right now is about 4.133%, let's just say 4.2%, OK.
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  Suze: And normally what happens is mortgage rates are anywhere from 1.5%
• 5:42
  Suze: to 2% above, they can be even more, but on
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  Suze: average 1.5% to 2% above the 10 year Treasury.
• 5:55
  Suze: So that is how they figure it out. So right now,
• 5:59
  Suze: given that you're probably looking at interest rate on a
• 6:03
  Suze: 30-year mortgage of about 6.25% right in there.
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  Suze: Write that down.
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  Suze: Now, if it is a projection that the Fed funds
• 6:15
  Suze: rate is going to be cut two more times this year,
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  Suze: and let's just say they're 25 basis points or more.
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  Suze: That may also cause the 10 year Treasury to come down.
• 6:30
  Suze: We'll see what happens there. So mortgage rates could very easily,
• 6:34
  Suze: as this goes on, land about 5.5%. So you have
• 6:41
  Suze: to think really carefully before you refinance. You don't have
• 6:45
  Suze: to rush to refinance right now, and you actually don't
• 6:49
  Suze: have to rush to buy a home right now.
• 6:53
  Suze: So you may be asking, all right, so I don't
• 6:56
  Suze: have to rush into buying something, but Suze, why do
• 7:00
  Suze: they attach it to the 10 year Treasury? Well, I'll
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  Suze: tell you why, because most of you, whether you know
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  Suze: it or not.
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  Suze: You most likely will only stay in the house that
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  Suze: you have just bought unless you're a lot older.
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  Suze: For 7 to 10 years, most likely only 7 years,
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  Suze: so they base that interest rate.
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  Suze: On the 10 year Treasury because it's right in there
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  Suze: for when you're going to turn around and sell that
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  Suze: house and therefore somebody else is going to buy that
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  Suze: house and they want to know that when you do
• 7:40
  Suze: that they're getting the correct interest rate on the new mortgage.
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  Suze: Did that make sense to you?
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  Suze: Therefore, that's why they do the 10 year Treasury.
• 7:53
  Suze: So now, however, I just want to give you an example,
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  Suze: of what that means cause all of you are always
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  Suze: so excited, Suze. I know I can barely afford the
• 8:05
  Suze: mortgage payment.
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  Suze: But now I can take my principal, my interest, I
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  Suze: can itemize it. I can be great, and I could
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  Suze: save money because of how much interest I'm going to
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  Suze: be paying on that mortgage. So that will make it
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  Suze: so that I can afford the mortgage payments today, even
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  Suze: though they're higher than I really want to pay. Is
• 8:29
  Suze: that true or is that false?
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  Suze: Because a lot of you now are working on an
• 8:36
  Suze: assumption in many cases that just isn't true, especially because
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  Suze: they have increased
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  Suze: the standard deductions to $15,700 for single people and double
• 8:52
  Suze: that for married filing jointly to $31,400. So are you
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  Suze: just better off taking the standard deductions or itemizing?
• 9:05
  Suze: Is your interest that you pay per year more than
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  Suze: the standard deduction or less? If you add in the
• 9:13
  Suze: property taxes that you can take off as well, if
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  Suze: you do all of that, how much can you really
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  Suze: save over a seven year period of time?
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  Suze: If...
• 9:25
  Suze: Start writing down now.
• 9:28
  Suze: Let's just say you bought a house for $375,000. I
• 9:32
  Suze: know a lot of them are a whole lot more,
• 9:34
  Suze: a whole lot less, but just let's say that's true
• 9:37
  Suze: for now, and you put $75,000 down.
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  Suze: That means today if you get a 30 year mortgage,
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  Suze: it's going to be a $300,000 mortgage at 6.25% interest, OK.
• 9:59
  Suze: So on this 30 year mortgage at 6.25% interest, your
• 10:05
  Suze: monthly mortgage payment will be $1,847 write it down.
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  Suze: The interest on your loan is going to be $18,650
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  Suze: that very first year.
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  Suze: And your property taxes are going to be approximately $4,125
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  Suze: so your total potential deduction is going to be $22,775.
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  Suze: That's the very first year.
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  Suze: So let's look at this as if you are a
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  Suze: single with $150,000 of income.
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  Suze: Given that you are going to be itemizing $22,775 you're
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  Suze: going to have a tax deduction of $7,075 or you're
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  Suze: going to be able to save in the 24% tax bracket,
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  Suze: $1,698 in year one in taxes. That's it. Now, obviously
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  Suze: you're going to itemize.
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  Suze: Because you are approximately $7,075 above the standard deduction.
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  Suze: So the very first year you're going to save approximately
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  Suze: $1,700 in taxes.
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  Suze: Now that's for the single if you are married filing jointly.
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  Suze: However, you still would only be itemizing $22,775 which is
• 11:54
  Suze: actually less than the $31,400 in your standard deduction, so
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  Suze: your tax savings are going to be zero.
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  Suze: If you then project this over.
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  Suze: A seven year period of time.
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  Suze: This single filer has saved anywhere between 1,500 to $1,700
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  Suze: per year in taxes or over seven years, $10,000.
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  Suze: The married couple,
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  Suze: they have not saved anything more. They did not beat
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  Suze: the standard deduction, so owning a home gave them no
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  Suze: tax savings whatsoever. The point of this is you really
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  Suze: need to figure out,
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  Suze: is a home going to save you in taxes, or
• 12:54
  Suze: is it not? So when you go to buy a home,
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  Suze: do not, and I repeat, do not think to yourself,
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  Suze: but the interest is a tax write-off, because let me
• 13:06
  Suze: just tell you one other thing here that has always
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  Suze: driven me crazy. After seven years of paying on this home,
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  Suze: a $300,000 mortgage. You have actually paid $125,229 of interest.
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  Suze: You have a mortgage balance of $270,142. You have only
• 13:39
  Suze: paid down $30,000 of that mortgage,
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  Suze: and maybe you saved $10,000 in this example.
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  Suze: Now, that is why,
• 13:55
  Suze: the mortgage companies love when you take out a 30
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  Suze: year mortgage because essentially they made $125,000 of interest on
• 14:09
  Suze: that loan because the big interest payments are all up
• 14:13
  Suze: front everybody. They're all up front because they know you
• 14:18
  Suze: are going to sell the house and the longer you
• 14:22
  Suze: keep the house,
• 14:25
  Suze: the interest rate portion of your mortgage goes down and
• 14:29
  Suze: down and down. So do you understand, everybody, why banks
• 14:35
  Suze: and financial institutions love to give you a long mortgage?
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  Suze: I just want to give you these numbers as well.
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  Suze: Do you know that just after 10 years, OK.
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  Suze: You have paid approximately $174,000 in interest.
• 14:53
  Suze: After 20 years you've paid approximately $308,000 in interest. After
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  Suze: 30 years, the full length of the loan on a
• 15:05
  Suze: $300,000 loan you paid $364,975 just in interest. But notice,
• 15:16
  Suze: in the first 10 years you have already paid over
• 15:21
  Suze: half the total lifetime of that loan in interest, and
• 15:26
  Suze: that is most likely when you will sell it between
• 15:30
  Suze: seven and 10 years. The last 10 years only,
• 15:35
  Suze: you are paying about $57,000 in interest.
• 15:41
  Suze: Which is why I always tell you, I want you
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  Suze: to pay your home outright if you're going to keep
• 15:48
  Suze: it forever, especially if it's going to be your forever home.
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  Suze: By the time you retire, because there is no longer
• 15:56
  Suze: really any interest deduction.
• 16:01
  Suze: Over the last 10 years it goes like from 5,000
• 16:04
  Suze: to 4,000. There's no true interest deduction, and it's obviously
• 16:09
  Suze: far below the standard deduction. I just want you to
• 16:13
  Suze: think about all that when you're buying a home and
• 16:17
  Suze: take that all into consideration and do not use the excuse,
• 16:21
  Suze: but Suze,
• 16:23
  Suze: my mortgage payment is going to be a tax write-off. Really?
• 16:29
  Suze: Do the math, everybody, right, but here we are. We're
• 16:33
  Suze: now in a situation where mortgage rates may continue to
• 16:37
  Suze: go down.
• 16:39
  Suze: And again, I think you might want to wait a
• 16:41
  Suze: little bit just before you rush out and buy.
• 16:44
  Suze: Or maybe even sell if you know you're going to
• 16:49
  Suze: need to buy again with a new mortgage, OK, but
• 16:52
  Suze: a lot of you really want to refinance and get
• 16:56
  Suze: your mortgage interest rate down.
• 17:00
  Suze: Let's just talk therefore about refinancing. I only want you
• 17:04
  Suze: to refinance if your new rate is 0.75% to 1%
• 17:12
  Suze: or even more, lower than your current mortgage rate, and
• 17:20
  Suze: this is a big deal everybody,
• 17:22
  Suze: you're going to stay in that home long enough to
• 17:26
  Suze: recoup the closing costs. So let me give you an example.
• 17:31
  Suze: You have a loan, 300,000, 20 years left.
• 17:36
  Suze: And you have a 7.25% mortgage payment for whatever reason,
• 17:41
  Suze: maybe at a low FICO score or whatever, and your
• 17:44
  Suze: mortgage payment is $2,400 a month. You now decide to
• 17:50
  Suze: take out a new loan for 20 years because that
• 17:55
  Suze: is how you would do it,
• 17:57
  Suze: for 6.25% and your payment would be $2,200 a month. However,
• 18:05
  Suze: it's going to cost you $5,500 in closing costs. Your
• 18:11
  Suze: savings will be $200 a month, so you need to
• 18:15
  Suze: divide the $5,500 or whatever your closing costs are by
• 18:21
  Suze: your savings per month of your mortgage, in this case
• 18:23
  Suze: $200 a month.
• 18:26
  Suze: So your break even would be 27 months. You have
• 18:30
  Suze: got to know that you're going to be in this
• 18:33
  Suze: home for at least 27 months. Now notice I said,
• 18:39
  Suze: that was the smart way to do it with 20
• 18:42
  Suze: years left on the mortgage, you refinance for 20 years.
• 18:47
  Suze: You never ever, ever want to make the mistake of
• 18:52
  Suze: restarting the clock.
• 18:55
  Suze: If let's just say you had 20 years left on
• 18:58
  Suze: your mortgage and you refied into a 30 year mortgage,
• 19:03
  Suze: even at a lower payment.
• 19:06
  Suze: You may end up paying tens of thousands of dollars
• 19:11
  Suze: more in interest if you keep the house all 30 years,
• 19:16
  Suze: so you want to always remember, match or shorten your
• 19:21
  Suze: term of your refinanced mortgage from the current mortgage that
• 19:27
  Suze: you already have.
• 19:30
  Suze: Many of you are writing me and telling me that
• 19:32
  Suze: you plan on cashing out,
• 19:36
  Suze: some of the equity in your home in order to
• 19:40
  Suze: pay off or remodel or do certain things. What you
• 19:44
  Suze: have to get is that if you're going to cash
• 19:47
  Suze: out with a refinance, you are never to take that
• 19:52
  Suze: money and do what with it? Use it to pay
• 19:55
  Suze: off credit card debt, a car loan debt, and possibly
• 20:00
  Suze: even student loan debt.
• 20:03
  Suze: You never want to go, especially with credit card debt
• 20:06
  Suze: if it's at a high interest rate.
• 20:08
  Suze: You never want to go from unsecured debt, which credit
• 20:13
  Suze: card debt is, think about it, you can't pay that
• 20:16
  Suze: credit card off. All right, there's nothing securing it.
• 20:21
  Suze: You never want to trade unsecured debt for secured debt
• 20:25
  Suze: when cashing out a mortgage where it is secured by what?
• 20:32
  Suze: The house you live in, do not make that mistake. Also,
• 20:38
  Suze: you really can't ignore all the hidden terms of when
• 20:43
  Suze: you are refinancing.
• 20:45
  Suze: Is it a 5 in 1 ARM? Is it an adjustable?
• 20:49
  Suze: What type of mortgage are you refinancing to. As interest
• 20:53
  Suze: rates are going down, I would tell you to absolutely
• 20:58
  Suze: do a fixed rate mortgage if, however, you know that
• 21:04
  Suze: you're only going to be in the house for three
• 21:07
  Suze: years or five years and you are taking out a mortgage,
• 21:11
  Suze: maybe you want to look at an adjustable rate mortgage.
• 21:14
  Suze: Like a 5 in 1, it's fixed for 5 years,
• 21:17
  Suze: but you're gonna sell in three or four, OK.
• 21:20
  Suze: Right, but after that it adjusts annually. And also, don't
• 21:25
  Suze: make the mistake of not shopping around.
• 21:29
  Suze: Because you never ever know like there was somebody who
• 21:33
  Suze: wrote in.
• 21:34
  Suze: And they had a mortgage with $4,000 of fees for 6.6%
• 21:42
  Suze: interest at their current mortgage rate and then they wrote
• 21:46
  Suze: me so upset because they found another lender.
• 21:50
  Suze: at 6.4% with $1,000 less in fees, so I want
• 21:56
  Suze: you to get at least three quotes, compare APRs, not
• 22:01
  Suze: just the interest rate, the APRs, the annual percentage rate,
• 22:06
  Suze: because that includes all closing costs and everything, and then
• 22:10
  Suze: see if you can negotiate costs. One last thing that
• 22:14
  Suze: I just want to say when it comes to buying
• 22:17
  Suze: a piece of real estate.
• 22:19
  Suze: Buying real estate today is not like buying real estate five, 10,
• 22:25
  Suze: or 15 years ago. Real estate today isn't about just
• 22:30
  Suze: the interest rate and what you're going to pay on
• 22:33
  Suze: the mortgage, and I've said this to you over and
• 22:37
  Suze: over again. Buying real estate today or keeping real estate
• 22:42
  Suze: today is all about what is your property insurance going
• 22:48
  Suze: to be.
• 22:50
  Suze: And don't be shocked if your property insurance payments are
• 22:55
  Suze: actually higher than your mortgage payments just depending on where
• 23:01
  Suze: you live. Are you in a flood area, earthquake area,
• 23:05
  Suze: fire area? Are you buying somewhere where they have had
• 23:08
  Suze: natural disasters and the insurance companies don't even want to
• 23:12
  Suze: insure there anymore?
• 23:14
  Suze: Can you just look at that before you decide the
• 23:19
  Suze: only way to make money is by owning a home.
• 23:22
  Suze: Maybe yes, maybe no. It is mandatory that you have
• 23:28
  Suze: property insurance
• 23:30
  Suze: if you have a mortgage. So you just have to know,
• 23:36
  Suze: that you can afford a tremendous increase, a doubling, possibly
• 23:41
  Suze: a tripling in your property insurance,
• 23:45
  Suze: before you buy a home, so you need to do
• 23:49
  Suze: that possibility. All right, that's your Suze School today and
• 23:54
  Suze: until Thursday, when Miss Travis joins us again for Ask
• 23:58
  Suze: KT and Suze Anything, there's only one thing I want
• 24:01
  Suze: you to remember when it comes to your money and
• 24:03
  Suze: is this people first, then money, then things. Now you
• 24:09
  Suze: stay safe. Bye bye.