I hear this argument about extending the term of revolving debt but I believe you need to provide context to your argument. First, if a borrower can invest the difference between their current payments vs. the extended loan that helps to negate interest cost. Second, you have the obvious tax deduction. Third, there ar generally no prepayment penalties so there is nothing stopping an individual from paying their debt off in a shorter period of time.
My Father currently owns his home cash and has a federal pension. When he recently asked for ways he might improve his ROI I suggested looking into pulling out 250K from his home on a 15 Year fixed at 5%.The home is worth about 500K and he currently has another 750K in diversified assets. Over a 15 Year time horizen I am fairly confident that the Stock Market will easily beat the net after tax of the loan. There are lots of military officers in the San Diego area who share this same profile. There pensions are garanteed and have steady cash flow, Add a working spouse or a second job and these individuals can afford to take on some risk.
