Pay off house vs invest.

I will not talk you out of it. I long for the day to not have a house payment. Mortgage deduction and historical returns, I get it. I do. Still, it is appealing to not have the bank own my house any more.

Your mortgage is a nice inflation hedge and the money will likely yield a much better return in the market.

But you can't put a price on emotional well-being and the feeling of security of not being in debt. That's why despite it not being mathematically sound, I always tend to pay a little extra monthly on my mortgage.

I guess it just depends on how much you value the peace of mind.

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The peace of mind would be nice. Please talk me out of this and into something smarter.

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Still have insurance and taxes. Those run me about $650 monthly.

Do I enjoy having my primary paid off? Yes

Do I regret panicing and paying it off some? Also yes.

Do I miss the payment? No.

I have 6 rentals that I'm doing the minimums on and using them as my retirement plan when I hit that age should have some nice income to live off.

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What's your interest rate

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2.875. Owe just over 300k on house.

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I really want to pay off my house but Interest rate is so damn low on the mortgage. The peace of mind would be nice. Please talk me out of this and into something smarter.

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Paying it off is a terrible idea, and perhaps if you understand why, you will gain peace of mind from that.

Unless you have an IO, then you ARE paying it off. If you expect to be gainfully employed and have decent insurance then the pay off IS going to happen no matter what, so...

You are borrowing money at a negative rate (given inflation) - that is to say, somebody is essentially paying you to have this money.

There are no prepayment penalties - I know that's sort of opposite of what I'm arguing, but the point is, this is a debt term that is unusual. Let's say you paid this off, but then had some emergency where you needed to borrow quickly - not only would that be at vastly higher rates/fees, but you also might be required to have it outstanding for a certain period of time before you wouldn't owe any fees.

There can be no margin call. Unlike, say, borrowing against stocks in your account, all you will EVER owe is the monthly payment. The value of the house can swing up and down, but it's somewhat irrelevant from your position as debtor...simple rule: make the monthly payment, get to keep the house.

It's long-term - who the hell gives someone 30 year debt at 3% on these terms? This is by far the most attractive debt you'll ever have...to the point that you should be considering it an ASSET.

The "peace of mind" you talk about is viewing it through a simplistic, biased lens - that of not having to make a monthly payment. However, let's look at your pre-pay scenario. OK, yes, now you only owe taxes and upkeep. But what if a big life event happens and you need money quickly? Too bad, you used a big chunk to pay off the mortgage. What if you are presented with an actual, distressed, generational opportunity to invest in something? Sorry, stuck with the 3% nominal return locked in by having paid the mortgage down.

TL;DR - it's just really hard for me to see the upside of you voluntarily paying off 30 year, negative real-rate debt with highly favorable terms to the borrower (you). For me, peace of mind would be having the mortgage for 100 years, and not "just" 30.

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2.875/ ~26 years left.

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If it makes you feel better to pay it off quicker, just put a decent chunk towards it (interest is front loaded) and the rest of the over 300k left you have into something with a higher guaranteed return than 2.875. There are a ton of guaranteed options right now better than that.

"Paying it off is a terrible idea, and perhaps if you understand why, you will gain peace of mind from that."
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Big Scrubb explains it all in his detailed post.

Peace of mind is worth more than a sliding stock market.

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2.875. Owe just over 300k on house.

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Holy cow you can take those funds and put it in a near zero risk high yield savings or money market account and make over $1,000 per month in extra cash. Hell if you really are dead set in paying off your mortgage early (I would highly discourage that at 2.875%), take the extra $1k a month generated by your $300k principle and throw that at your mortgage while keeping the principle in tact. Your peace of mind is still there in the form of $300k in liquid cash should the need arise and you must pay off the house with it. Further peace of mind should be that $300k in liquid cash could also go to any other emergency that may arise whereas you would not have that chunk of cash if you paid off your house.

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So, I lose a nice interest deduction

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Is this even enough interest to deduct?