Does it make sense to borrow to buy i bonds? For example borrowing from a home equity line of credit at 5%?
Not if inflation cools down quickly and the I-Bond variable rate slides below 5%. If we have a recession, inflation could cool off like that. David Enna publishes the Tipswatch blog and marches through the calculation the government uses to compute that variable rate if you want to study how the sausage is made. If you do borrow money, I’d pay it off pretty fast, like in a year or two.
I don’t think this makes sense at all. Right now there is some arbitrage based on historic high inflation in the CPI-U, but a lot of people think this will taper next year. Im not sure we will get back down to the low interest rates of the last decade that will affect your HELOC rate. So I would expect this arbitrage to evaporate by the end of next year. Not worth the risk IMHO…
Oh OP wants to borrow from a HELOC? Variable or fixed rate? I’d only borrow if fixed rate, you have tons of home equity, full emergency fund, and your employer loves you and the business is doing well. Otherwise… be patient and buy gradually. After six years I have six figures in I-Bonds. You’ll get there!