<p>POIH,</p>
<p>We paid off our mortgage with the same intent as you are proposing, however we did this several years “before” our oldest entered college. We would be full pay either way with mortgage or without. We got rid of mortgage, socked away the money we would have paid in mortgage/interest into CD’s. Spouse and I both have strong retirement funds, so it is not sacrificing one for the other. We do not qualify for any significant tax breaks because of mortgage deduction, it was stupid in our situation to believe the deduction was worth anything. The peace of mind of not having the mortgage issue hanging around our neck if a job loss occurred and again not unlike what you are thinking, if job losses occurred, we would still be full pay.
On top of a cushion, we have a HELOC for dire emergencies, have not had to use it, but it is there.
Property taxes/insurance are still way below market if we had to rent a home.
For us it was the best thing we ever did.
Although spouse cries poor mouse all the time, I don’t think he realizes how lucky we are. Most families with two incomes spend as two income families, we never did. We bought a home as a one income family, spent as a one income family, yet we have always been a two income earning family.
My father thought we were stupid to pay it off, saying “oh your losing your mortgage deduction” if most people ran the numbers properly, they would realize that is a fallacy, just makes one feel ok about paying a mortgage. In fact paying it off early lessened our AMT liability somewhat. For us it was a sound move.</p>