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Lets say you owe $100K on your mortgage. According to the SWR, this is worth $4k/yr - plus you get to increase it for inflation.

Your annual mortgage payment is $10K/year, for the next 12 years.

Is it better to pay off the mortgage, or keep the $100K and pay it for 10 years.

Let's suppose:
Mortgage interest rate - 3.5%
Investment returns - 7%
Inflation - 2%
Just the standard deduction, not enough to itemize.

I think I know the answer (pay it off over time), but I want to see if I'm missing anything. This excludes all the psychological factors like the peace of having a paid for house, etc.

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