so i have this opportunity through a state energy initiative to have my furnace (installed 1980) and my water heater (installed 1979) both replaced, and my house insulated, at a reasonably low interest rate (5.9% 20 year loan) that i would pay as part of my monthly energy bill (no penalty for pre-payment). It's all top rate contractors and pretty solid. But it's still about 7k for everything.

I've kinda always been of the "if it ain't broke, don't fix it", but hot air and hot water are both very important to me, and i worry that if i wait for them to break down, one by one, it'll still be really expensive but without the convenient financing and with days/weeks of misery waiting for replacements. It's not like i have $5k for a new furnace just hanging out in case (i know i should, working on that, but not there yet.)

I guess i'm wondering what others think? My mom thinks it's fabulous, my Dad grumbles to not throw money at something that is working just fine. I see both points of view. I'm leaning towards taking the plunge but only insulating attic and basement and trying to talk them out of blow-insulation in all the exterior walls (my house was built in 1905, so i'm lucky there's evena wisp of insulation in the attic). I get scared making big financial decisions without clear guidance. *whimper*

erin, I think it sounds reasonable. I am big fan of updating things before they break, so that you have options and the ability to plan the best tact.

Oh, I'm completely fine. Annoyed because I thought to myself, "I should pass this truck" about thirty seconds before it happened, but totally fine. Just big chip and quarter-sized starburst. I only need to get it repaired and thus can't damage it further to the point it needs to be replaced.

I'm already looking at web quotes and will actually call for more and an appt once the snuggle cat leaves my lap and I can go grab my phone.

erin, I think it's worth it. Your bills should go down otherwise considerably, with more efficient appliances and added insulation. And yes, beter to choose the time and manner of replacement than have them go out on the first day of a three day weekend.

erin, I'd seriously, seriously consider it. You need insulation (why not exterior walls?) and honestly it's a good deal and better for the world to replace with more energy efficiency. Also those are things you are going to need to replace. Probably sooner rather than later. Better to do it with a good deal and with a clear head as opposed to omg emergency because there is no hot water.

Oh, heh, what smonster said better than me and just before me.

I second those who are encouraging you, erin_o. Those appliances can and will go down at any moment. In the last 14 months, we've had to replace a furnace and water heater which were both significantly younger than yours. The new ones are more fuel efficient than the previous ones. I'd bet improvements in efficiency for you would be even more noticeable. Plus insulation? Definitely a good deal. I would also strongly encourage you to pay off such a loan at a faster rate than 20... also, what happens if you decide to move? Do you get to pass that loan onto whomever buys the house from you, or are you stuck paying for major appliances in someone else's home?

my Dad grumbles to not throw money at something that is working just fine.

Depending on how you define the terms - I'm fairly sure a 40 year old water heater is not, in fact, working just fine. Ditto the furnace. The energy usage for things like that are not even in the same universe anymore. And that's before you take into account the insulation.

You might look into whether you'd still be eligible for federal deductions for the new appliances too - might be even more benefit if you can deduct some or all from your income taxes.

my Dad grumbles to not throw money at something that is working just fine.

Depending on how you define the terms - I'm fairly sure a 40 year old water heater is not, in fact, working just fine. Ditto the furnace. The energy usage for things like that are not even in the same universe anymore. And that's before you take into account the insulation.

This. All of this. Given their age, they can and will die on you at any time, at the worst possible moment. And, again, given their age, they have got to be insanely inefficient, which means with new ones, you'll notice a difference (i.e., savings) in your utility bills.

You might look into whether you'd still be eligible for federal deductions for the new appliances too - might be even more benefit if you can deduct some or all from your income taxes.

IIRC, that tax benefit was extended into 2011, but you might want to double-check it. Also see if your local utility company offers any incentives/rebates for buying energy-efficient appliances/whatnot.

Also, $7k is a REALLY good price for HVAC, water heater, AND insulation. I mean REALLY REALLY. If we could have done that for just an extra $1k on top of the HVAC we just had installed, I would have been all over that in a hot minute. And 5.9% is a very good interest rate.

t edit Also, I have to echo Cass and ask -- why not insulate the exterior walls? Because if you do that, it'll just decrease the need for the furnace to kick on, and lower your utility bill even further.

Also also, all of those improvements are going to add to the value of your home, which you might not care about if you're not planning on moving any time soon, but then again, you never know.

Do it, erin. The new furnace and water heater will be at least 30% more efficient by themselves and with the insulation, you'll see a really significant drop in energy costs.

Also, when water heaters go, it's ugly, since one that age is working on rusting through.

If you're going to not insulate something, the basement is usually the last priority, not the walls, although I know the walls are more expensive. Get the HVAC guys to seal and caulk everything while they're there.