[quote=ocrenter]When I paid the MR off, we still had 22 years to go on the MR. Total cost over the 22 years would have been $150k. With the payoff at $58k, and one of the MR at 7.5% the calculation came out in favor of payoff as we essentially “earn” $92k by paying the $58k upfront.[/quote]
Excellent thread.
OCR,
Did you take into account the tax deductibility of the MR (let’s put aside the debate on whether or not it’s allowed or legal for now) – I assume you didn’t? Would your conclusion be any different as to whether or not it’s advantageous to pay off MR? Using your example above and let’s assume you’re in the 30% tax bracket, by paying off your MR you earned roughly $45K instead of $92K. I am pretty sure that even with the most conservative investment vehicle, you should not have any problem doubling your money in that 22 years period. Personally, I would have hung on to that cash.
