Hm I think I would look at it like this: you would've paid that 1000 bucks one way or another, whether you do it in installment plans or not. I sympathize with the feeling of taking the money of your savings too, as I also hate the feeling of giving out large amounts of money. I would pay the $1000 now, and then just do the $200/month installment plan (to your money market instead of the school) after the school year ends until you have replaced all that money. You can still get your home improvement plans done, though possibly a little bit later. I don't pretend to know the condition of your home or how badly it needs these repairs but I don't like have debt that I can get rid of and would pay off those debts if I had the money.

Also...
5% of 1000 is $50, whereas 2.7% is only $27. 1% of $200 is $2, which means you make $12 if you pay the installment plan, for a total of $39 by keeping the $1000 in your money market vs giving it all to the school now and making $50 off of it.

Karma, btw, is reciprocal :D