Quote:
Originally Posted by Sylvanfan
But all things being equal, I would suggest using extra money to get rid of the mortgage debt which is not tax deductible first. I understand the Smith maneuver thing, but the mortgage part is never tax deductible, it just decreases as the "secured" line of credit increases, which is the part you can write off.
So if you can pay down your 5 year mortgage in 3 years, I would say pay it off rather than pay it for 5 years and use your extra money to invest.
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Sure, if the difference was a mere two years that sounds sensible. But if you take 20-25 years as the norm then some of those funds you're investing are compounding for that period of time. Thats where you're making the major gains here (along with the tax deductions that begin to pile up over time).
I think the question the OP wanted to ask was "would you rather have a mortgage for $200k or credit card debt of $200k?" but knew the answer to that.