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I would never pay off the mortgage in your situation. Right now you can get something like 4.75 APR on a 5-year jumbo CD. Rates are likely to go up. Now, 4.75% compounded over 5 years is a little over 26% total return. This will be just enough to cover your (simple, not compounding!) mortgage interest over the same 5 years. If you then put the money in a new CD at the same or higher rate, you will get more in CD interest than you will have to pay in mortgage interest. Taxes are irrelevant because the mortgage interest deduction offsets your investment income. This is the power of compounding interest!

Of course, this is a guaranteed way you can be better off not paying off your mortgage but rather investing the same money over 5 years. If you have enough income and savings elsewhere, you can try to increase your return by partially investing in stocks.

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