So I pass the bias test because I have nothing to gain except potential inheritance, but I reccommended to my father about 2 to 3 years ago to take out a 15 or 30 year mortgage as rates got into the 4’s so that he could invest in the market.
My feeling was that interest rates were artificially low and that for someone like my father who had guraanteed income (federal Employee) it presented an ideal opportunity for him to improve his rate of return.
Additonally I looked at break points on managed funds (The American Funds) and felt that he could get good money mangement at a reduced cost by moving his money into a single Fund family with different categories of investment options.
To me I see know reason to shorten the life of this type of debt. I feel the hurdle rate of 4 or 5 % is fairly easy to outperform over the long haul. Add to it the potential tax savings and the fact that you can lower your costs of entry into different fund families due to the economies of scale and I come to the opinion that it is best to utilize debt in this capacity.
