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I have seen a lot of commentary on whether or not a person should pay off his mortgage early. I believe it depends on too many factors to decisively say.

I want to share my friends experience and the advice i gave him.

Total Income - 145,000$/Yearly
Home Purchase Price - 450,000$
Mortgage Loan - 360,000$
Interest Rate - 4.125%

My advice to him: Do not pay off the mortgage early.

1. With a mortgage he is able to itemize and as a result his effective tax rate for the mortgage is much lower than the listed 4.125%. If his tax bracket is 25% that makes his effective mortgage rate lower than 3%. I know there is the standard deduction but now that he itemizes because of mortgage he is able to deduct property taxes, donations that his wife makes to Goodwill (1500$ yearly) and other items. This money would be lost if hehad not itemized. One example is he donated a washer and dryer to Goodwill that he could not sell on Craigslist. He valued the donation at 500$ on his taxes. If he pays off his mortgage he loses this advantage.
2. While you are not likely to make 8%+ in stocks unless you are a good stock picker, if your effective mortgage rate is less than 3% there are many bonds and munis that offer higher yield.
3. The longer you hold your mortgage the more inflation eats away at it's actual value.

I have a tendency to want to pay off debt as soon as possible but if you are smart with your money the U.S. system is built to reward debt and screw over savers.

Let me know your opinions on the advice I gave him.