My partner and I have 45k in savings, 25k of which is earmarked for a down payment on a home. The other 20k is intended as our emergency fund/moving in expenses. In October, when my partner has been at his job for a year, we plan to get pre approved and get into our first home. This is the plan we’ve been building toward over the past year.

I have 32k in private student loan debt right now. My monthly payment is $553. Lately having the option to pay off the loan in full has been so tempting. Getting rid of the loan would help our DTI, make the monthly mortgage more manageable, and save thousands in interest. It would also increase the average age of my credit (this loan is 2 years old and my oldest loan is 13.5 years old, so it’s lowering my average to 5.5 years). So potentially I could increase my credit and get better loan products as well. We would still have 13k to our name for urgent expenses.

If I do this, the down payment will be gone and it will take at least a year of aggressive saving to get it back. So our home buying goal would be delayed. It’s tempting to rationalize that waiting another year or two would be okay - maybe housing market will be less crazy then? Maybe we will be in a stronger financial position to get a more desirable home? Or maybe… the goalposts will just continue to move and housing will be even less attainable, canceling out our efforts (the trend of the past few years).

Insight from Reddit land?