http://lenpenzo.com/blog/id1131-12-good-reasons-why-you-should-and-should-not-pay-off-your-mortgage-early.html

Because of the fiscal insanity demonstrated by the government’s runaway spending, aided and abetted by the Fed’s relentless money printing campaign, I’ve since changed my stance since writing this article. See: http://lenpenzo.com/blog/id617-paying-off-the-mortgage-early-not-so-fast.html

In short, I believe extremely high inflation is now virtually inevitable. Assuming I am correct, it makes little sense to pay down my debt early with today’s more-valuable dollars, knowing that the greenback will be worth much much less in the future. Until the government — and the Fed — show a commitment to protect the value of the US dollar, I will refrain from paying one-cent more than I have to on my mortgage every month.

I am 48 and owe $180,000 on my house. I have 9 years left to pay. I could reduce my 401k to the minimum 3% and use those funds to pay my house off in five years. I have ($425,000) in my 401K.) My interest on the house is 3.5%. I make over $100,000 a year. I have no other debt, and am not upside down. The kids are almost gone and I am in great shape. I would like to pay off the house early and release myself from this debt. There are no articles that I can find that discuss the current markets conditions I face in 2011 and how that may change the discussion on paying your house off early with investment funds. I like your site very much and would be interested in hearing your thoughts.
Appreciatively,
STP

There were two reasons I did not go with the 15-year mortgage:

1) The primary reason was that I wanted to lower my monthly payments so that I had flexibility in case I lost my job. This decision was influenced by the bad economy we are currently in. I am the sole bread winner in the family, employed in an industry that can be very cyclical with respect to employment. With my new monthly payment reduced by almost half to about $640, I can make that payment working at most any temporary job if I had to, assuming I got to the point where I exhausted my 6-month rainy day fund cushion. Keep in mind that as long as I remain gainfully employed, I still intend to make the necessary payments to get the loan off the books in 10 years.

2) The second reason was actually, believe it or not, the spread between the 30, 20 and 15 year loans were nearly identical. Even if they weren’t identical, the monthly payment with a 15-year loan would have been close to my old payment of roughly $1120, which limits my flexibility in the event I lose my job.

Len

Len