<p>I am sorry I didn’t make it clear.
In above scenario, there is an existing $35K equity loan which needs to be paid off anyway at the end of five year term.<br>
The question is whether to pay off the equity loan in $7,000 installments over five years or wait till the end of five years to pay off the equity loan.
If the equity loan is paid off at the end of five year term, there is more money to put in to the 529 plan during the five year term.</p>
<p>At the beginning total funds = $20K + $30 - $30K
At the end of five year term total funds in th e529 account is (according to my calculation):
Plan 1 = $ 34 K
Plan 2 = $ 85 K
Plan 3 = $ 87 K</p>
<p>Total funds in all accounts after five years (529 + retirement - mortgage)</p>
<p>Plan 1 = $42 K<br>
Plan 2 = $65 K
Plan 3 = $76 K </p>
<p>Above assumes that equity loan interest to be 8% and the interest gain from 529 and retirement accounts to be 15%. And the 8% interest for retiremment account loan is paid to yourself.
Above numbers seems to be too good to be true!<br>
I am wondering whether others had done similar calculations.</p>