<p>
</p>
<p>So withdraw the initial amount. Keep it safe for however many days you have to, and then paydown the HE Line. I’m guessing the current interest rate on the HE line is no worse than your mortgage.</p>
<p>Let’s also lay to rest the idea that tax effects make borrowing a benefit.</p>
<p>Let’s say you pay $1,000 of interest on your mortgage, and you are in the 30% tax bracket. That deduction saved you $300 on your taxes. Net cost of borrowing is $700. I don’t think I am missing anything by saying it COST YOU $700.</p>
<p>The differences between the cost of the mortgage at 5% vs the earnings on the CD of 2% is 3%. And ALL THE NUMBERS are pre-tax. If you want to talk after tax, then adjust all the rates to after tax numbers. That’s the only way to compare apples to apples. No reason to mix in oranges and bananas to confuse the analysis.</p>