I think where you stand really depend on where you sit. earlyretirement is already retired with many investment properties, so I’m assuming he has $xM in the bank/investments as well. So, of course, have a paid off house makes perfect sense. Not because the number makes sense but because he can afford that peace of mind (if having a paid off house give you that).

However, for most people who are not there yet or will never be there, having a paid off house pose a significant risk. Lets take an upper middle class area today and your house is worth $700k and you owe $560k on it. Lets also say you have $1M in the bank, so you have an option of paying off the home or not. Lets take CAR scenario of great depression for example. How long can you live off $440k if you don’t have a job but also have a free and clear home. Assuming your yearly expense is around $60k w/out housing. You’re talking about 7.3 years before you’re out of cash. Depression also mean your house value went to the $hitter so no refi to take money out. Now, lets take a look at what would happen if you didn’t pay off the house today and have $1M in the bank. Your yearly expense would be $60k + $32.4k (housing) = $92.4k. Your $1M will keep you alive and housed for 10.8 years. That’s assuming you make 0% on your $1M or $440k. Either way you have a much better chance of riding through the storm with $1M in the bank and a $560k mortgage than a paid off house + $440k in the bank. If it takes 8-10 years to get out of a great depression, you’d be in deep $hit if you paid off your house (you’d either have to sell your house or drastically change your living standard). If you didn’t pay off your house, you’d have 10.8 years of buffer money.

So, it really depends on where you are in term of retirement savings. A paid off house is not risk free. If anything, I see that as a much bigger risk than having a mortgage.