We have a 5.375% mortgage rate on a 15 year fixed loan. Our original loan was a 6.75% 30 year fixed. After refinancing, we save about $200K in interest payments. For me, this is a much safer diciplined saving method over dollar averaging mutual fund investment. i will always find execuse to blow the investment I accumulated like replacing a car, or redo our backyard since I know “I have money in my accounts”. But money paid to the mortgage is something I can’t touch… In the long run, it works out better for us to pay off the mortgage.

We are in our mid 30″s right now, By 2022, we will be done with our mortgage.

I agree that if your mortgage rates are low then alternative investments might be the way to go. Mine is currently 2.85% (variable), I’m socking my extra cash into investments that are paying me 9% after taxes. This income is not only servicing my mortgage but the extra income will eventually be used to payoff some of the principle on the mortgage.

As “funny” points out in their comment – why put extra money in an “asset” that is depreciating (which mine has since 2006 and I believe will continue to do so until 2012).

The cap my mortgage is 10%. Once the rate increases to above 9% (hopefully not for awhile), then I’ll have to reconsider this strategy.

My sense is that, as delicious as it is to be rid of the dratted mortgage payments, the smartest move is probably to get rid of revolving debt first, then pay off the car loan as fast as you can. That leaves you in the enviable position of being able to decide whether to budget to pay down the mortgage or to contribute to savings. Or some of each.

At the time I paid my house off, a “good” mortgage rate was around 8.4 percent. I don’t recall what I was earning in the stock market — in fact, at the time probably hadn’t yet learned how to figure it out. All I knew was that between prepaying principal and then later cashing out a mutual fund, I could free myself from a house payment that equaled more than half my piddling net salary, and that once SDXB moved out and I lost his “rent” payments, I could not could not live on what would remain after I paid the entire bill.

HOWEVER, right now mortgage rates are extremely low and return on securities investments is about average. Real estate values remain depressed and probably will not begin to appreciate again for some years. As long as those conditions hold, we’re in an entirely different scenario…one in which it may be to your advantage to invest extra money in higher-returning investments rather than throwing it at your mortgage.

Experimenting as we scribble with the 0-detergent laundry. Already made an interesting discovery. More later!