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During the midst of the tech rally, there were many discussions of this subject on TMF. Many strenuously argued that not only do you get the tax write off for interest expense, but the returns you can get in investments are much higher than the interest costs of your mortgage.

First, the tax write off concept is bogus. Yes, the interest is deductible, but the tax savings depends on your incremental tax rate. Probably about 25% these days. So for every dollar you pay in interest, you save only 0.25 in taxes. Its tough to make money that way.

I have always paid off the mortgage at the first opportunity. Then you have extra cash flow which you can invest. This is the low risk approach, which works fine as long as you have the discipline to make sure that extra cash actually gets invested. If you are likely to spend it, then the forced mortgage payments is a better deal.

You seem well on your way to a solid financial future.

Fool on!!
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