The tax deductibility of a mortgage is a partial illusion and very misunderstood.
Depending on the size of a household, the standard deduction can be substantial and a better choice.
The true net deduction is the *difference* between all itemized deductions and the standard deduction.
The standard deduction is the same across the country and in areas with low housing prices & property taxes in many cases the standard deduction is a far better option than itemizing.
For those with plenty of cash, assets, good credit & cash flow it can be wise to just eliminate their mortgage & simplify their lives.
This isn’t right for everyone.
It is foolish to accelerate a mortgage for those with 10-20-30% credit card debt, yet I’ve seen people do it.
With good credit, There are currently creative ways to borrow money for 1-2 years in the 1%-3% range.
1)You pay interest with after tax dollars.
2)You pay income tax on interest you receive.
3)NOT paying interest to someone else is a guaranteed *compounded* net return equal to your
interest rate.
There’s a distinct difference between the 3.
In some cases I’ve suggested that people take 401K loans to eliminate their mortgage and repay themselves AND reduce their exposure to the stock market.
It’s an effective strategy using pre-tax dollars.
*Not suggested for everyone*
