patrick.net

It's good advice as long as he invests the money instead of blowing it on drugs and hookers.

Ironman says

Also, where is the house and what's the appreciation in the area? Are home values going up or down? Locking up money in a house in a depreciating or stagnant market versus investing it has to be evaluated.

The house is in Portland, OR which has seen high appreciation in the last few years.

But what does it matter if the house is stagnant vs. appreciating unless you are going to bail with a non recourse loan?

I wonder if there are more ways to make the itemization work to your favor?

Ironman says

It does if you're gaining or losing equity, if he needs to sell. If he's paying 4.125% (effective 3% after tax credit) but the house is losing 5% value every year, he's going backwards. He would be better taking his money and investing it someplace else besides the house. If the market has been going up 3% - 5% a year, it's like a future savings plan for his money.

This is why you don't ask Ironman for financial advice. Portal is correct, of course. Whether the property is gaining or losing value matters not in the decision about whether to pay off a mortgage early. You already own the asset so you are getting the appreciation or depreciation regardless of how fast you pay down the mortgage. The relevant factors are mortgage rate and expected return on investment.

My biggest reason and only reason is the unpredictable ever more greedy insurance industry.
Every year since I bought 5 years ago, they have raised the insurance by $300 to $500 a year. This year they tried to raise it up by $5000, they made me jump through some hoops. Do some home repairs, basically replace several Items in the house that was fine, and I had to clean and paint my roof, then got it reinspected. And then was made to feel like the $1200 they raised it was a hell of a deal.
While I was put on notice that inspections in the next 3 to 5 years, could bring these back out. Unless I take out about $70,000 loan and replace all my windows with high impact windows, and a few roof modifications, that eventually I will be raised up to $7000 to $10,000 a year or more. Then even then if I do all of those upgrades, there's no guarantee that the insurance companies still wont find other ways to raise insurance. All of this during a Hurricane drought in South Florida if anything the prices should be going down not up.

If I can't afford an extra grand or two a month now, then I sure as hell wont be able to afford it 5 years from now. So I did the math and figured if the worst case scenario for Insurance was a reality now, with the extra money I would have to pay to insurance company a year. If I instead put that to my mortgage I would be paid off in 5 years.

So fuck it! That's what I'm doing.

DieBankOfAmericaPhukkingDie says

While you're waiting for service describe the FREE!DOM! of life without debt, the ecstasy of never having to deal with satanic monsters like banks any more, the endless orgy of unending days of TOTAL! FUCKING! FREE!DOM!

Why do you hate the nanny state, and the warm comfort of peeing/shitting your pants, er ah having the government taking care of you?

http://lenpenzo.com/blog/id1131-12-good-reasons-why-you-should-and-should-not-pay-off-your-mortgage-early.html

Pretty good article showing pluses and minuses. Note it is an older article (2010) during the "oh my gosh inflation!" sentiment era. I pretty much scratch inflation off the list of negatives to early paying off the mortgage. There has been deflationary pressure for years, hence the super low interest rates.

tatupu70 says

The relevant factors are mortgage rate and expected return on investment.

As tat' says ... what are you doing with the other capital/investments you have? Is it advantageous to keep the debt, and plant the money elsewhere to grow?

Personally, I'm strongly considering paying off our house in a year or two. My lizard brain looks at stock gains as "fake money", as well as home value gains as "fake money" (fake money ... maybe more accurately said as 'the potential to be real money').

That means there are only two real things in my brain : income and expenses. ;) (dividends = real money though.)

Will the money he saves earn him more than 4.15% return?

Most people are better off paying their mortgage off and saving all that interest over X years. There is no better feeling than not owing anyone a penny, a free man!