Through the Looking Glass: At What Price Point Would You Get a Loan for Windows

The other morning as I was finishing up my run, I noticed someone a few blocks away from our house had gotten new windows.  Though I didn’t check the windows on the back of the house, I was able to see all 3 sides and would guess that they replaced every window on the upper level of the house.  It was at least 6 windows, with 2 of them being rather large.  The windows still had the brand sticker on them, and I recognized the brand as a pretty energy efficient window.  I immediately thought back to the time that H and I had someone come out and give us an estimate on new windows in our house.

If you dont recall, we got a quote for a window in the bathroom, and it was about 10x more than the window that we ended up installing.  The product, however, was impressive.  Far more energy efficient than our current windows and still better than the new one.  At the time though, we were just tired of tossing money into the bathroom and opted for the not as good (but still far better) cheaper window.

The next thing I wondered was what it would take me to take out a loan to replace the windows in our house.  I’d guess it’d cost somewhere around $8,000 to replace all 21 windows upstairs.  Clearly, that’s no small number.  However, our most recent heating bill came for december (we were gone for 9 days) and it was almost $200 dollars!  We knew that we had a terribly inefficient house, but were not sure how much it would cost us on a monthly basis to heat and keep sorta warm (H and my parents say that the 65 degrees we keep the house at is ‘freezing’).  Using the december numbers as a barometer, we are on track to spend around $1,000 on energy costs this winter.  That is a lot of money – clearly more than we’d like to pay.  Even more so because we know the house has 0 insulation (except in the bathroom, which we put in) and most of what we pay to heat is flowing right out the door and window gaps.

Even though I’m against debt in the majority of situations, interest rates are low right now.  I’d guess that we can get a loan for this sort of thing for around 5%, if not less.  We would obviously be on the hook for the interest and be chained to the debt, but once we got the windows installed, we’d start seeing immediate savings in the form of lower energy bills.  If the rate and the terms were right, this could turn out to be a cash flow positive deal (at least in the winter time).

Not only could we save money on our energy bill immediately as opposed to waiting until we saved up the cash to replace the windows, we’d also make this house a lot more sustainable.  Right now, we are wasting an obscene amount energy because our house is so inefficient – a loan for new windows would curtail that amount heavily.  Of course, it wouldnt get rid of the waste all together, but it would go a long way.  The one question is, what sort of price are we willing to put on the amount of good that we are doing for the earth?  This is something that we talked about with the washing machines, and our bill has gone down by about $10/month since we put the new ones in.  This though, isn’t an almost $8,000 purchase, those cost just over $1,100 for both.

Of course, I’d need to run some actual numbers and see how much we’d save over the year and what sort of interest rate we’d get (I think there’s a federal program that gives loans for energy efficient home upgrades, but I dont remember).  Once I knew the exact numbers, it would be a lot easier to make a decision.  Until then though, there’s always speculation.

If we’d save money overall for the year (though we may not save money every month) I’d be for it.  Obviously, this would require a rather large energy savings and a small interest rate, but it could be done.  At the break even point or even if it cost us $100 or less for the year overall, I’d probably still consider it.  However, I think if we ended up paying more than $250 per year (over and above energy savings) for our impatience, I wouldnt do it.  Obviously, savings rates are impossibly low and aren’t going to help us at all.

Readers: Have you ever thought about this?  At what price point would you upgrade whatever it is, and at what point would you just wait and save your money?  This will only work for huge wins like new windows, and wouldnt even matter for many smaller energy efficiency upgrades.  


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7 thoughts on “Through the Looking Glass: At What Price Point Would You Get a Loan for Windows”

  1. It would probably have to be a circumstance where the windows were failing so bad that they were completely ineffective or allowing water to come in which could be much more costly. I’m just very averse to taking on new loan payments.

    • I know what you mean beagle – these windows are not leaking, but they are awful. Very inefficient. I fall on same side as you – I’m very hesitant to take on a new loan payment for something like this. Even though we are not even thinking about moving right now, it’s not 100% out of the question (not many things are). In that situation, it’s possible we could still be paying off a loan for a house we no longer own or live in!

  2. I’m trying to think of another example like your windows – something that costs a lot but pays you back in spades. Maybe an energy-efficient furnace or a new tankless water heater? But those are usually things you only replace in an emergency…

    • One example for our house is insulation – we dont have any at all. That could be worth it. And it’s interesting that you bring up emergency replacements of water heaters and furnaces. Typically people dont replace those with efficient models for that reason. When the water is freezing cold all the time you just want hot water back, and dont really think about the cost or the efficiency of the model until it’s already in and working properly.

  3. Jeff,
    I’m guessing your right about the windows in the old house. But what about ceiling/attic insulation? Could you get more bang for the $$$ doing that since it costs way less? Windows you can always do 1 at time and chose the worse first plan and maybe pay cash as you go for the first few. Remember, Hot Air Rises” so the attic is always a good place to save money

    • Great point – We havent really gotten any quotes on insulation yet, but it’s probably much easier and cheaper to do that than it would be to replace the windows. But once the low hanging fruit of insulation has been picked, windows are most likely the next step.

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