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My situation is somewhat similar to your yours: married, wife stays home with kids, don't hold credit card debt, 1 low interest car loan, retirement savings are a priority, and a starter home.

A about a week ago we took our cash and paid off the house. Then immediately opened a home equity line of credit.

We were paying 6.74% on the loan (it wasn't enough to be worth refinancing). And we were making ~2% on the cash.

The available balance on the HELOC is more than the cash we had before, and we get/save an extra 4% (6% - 2%).

If you run the numbers in a spreadsheet, you will see that your debt will be paid off quicker if you put all your extra money towards the highest rate debt.

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