If this is how you understand a loan, then you should stay away from mortgages. First the obvious, It is 4% per year, on the remaining balance, payed monthly.
Second, borrowing money at rates below the inflation rate just makes sense, add in a tax break and it is a no-brainer.

I'm sure he pays more in interest every year than what he gets from uncle Sam. Figure 4% for a 200k mortgage = $8000 yr. Put that 8k in retirement or mutual funds would be a much better idea.

I have no debt and it feels great. I have 1 cc for gas and 1 that is used mainly for vehicle insurance. Both are paid right away

I have borrowed more money over the last 15 years than I did when we bought our home. When I can borrow at 4% and that goes down each year on the balance and I can get 4 to 20% in investments that goes up, why would I take money out of investments and savings to say I am debt free. If I die tomorrow there will be money to pay the debt if needed and the final costs. If I don't have the funds to pay off my debt then paying ahead a little bit each month makes sense, because if I can't save money I have nothing to secure income if I lose earnings. At 72 I currently don't have any debt but if I want to upgrade vehicles, or home etc. I would not hesitate to take out a 20-30K loan instead of pulling funds out of investments. You can say the bankers have these people fooled but when you look at the returns and the capital gain tax treatment managed debt can make you money and help build wealth.

Bryce

My old man got it in his head that if you still owed on the mortgage, you couldn't lose your house in a lawsuit, (Alcoholic that would get behind the wheel crap faced), so he paid a couple of dollars in fee's every month for years instead of making that last payment.

It takes money to make money, unless you work for the man.

I wouldn't be in business for myself had I been scared to borrow money.

I would tend to agree Hippie, however, I just dont beleive the initial money has to be borrowed. Not condemning how you did it, but its not the only way.

I hear that a lot. But I don't think that's always the case. You still have to pay property tax or risk foreclosure.

Trapset, you are correct, however, I think that is different. You cant get out of paying taxes, they are with you for life..unfortunately. a mortgage on the other hand is a risk that you can control by eliminating it.

I looked at it this way.......

I could work for someone else until I had enough money to go on my own, probably I'd be well into my 40's or borrow the money.

I semi retired at 50 the way I did it, borrowing.

My mortgage balance is well under my investment balance. My investments made 27% last year, and has average over 12% the last few years. That interest and gains also compounds. My
mortgage interest is around 3%. Yes, that 3% does compound as well but I can also deduct that interest as a cost. I figure that if I am paying 3 times as much into my retirement as my mortgage - I am fine. Now, if the market drops and my gains end up being under 6% a year - then I will shift my money towards my mortgage more - maybe. I allow my money to work for me.......

You also pay taxes on interest earned, no?

Yes you do but if you invest in securities much of the income is capital gain which can have tax brackets as low as 0 if you are below about 75K married and filing jointly and never more than 15%. If banks make money selling my mortgage why should I not invest in the income earning venues that they do?
To me if one is paying off a mortgage instead of saving money then the house you are trying to keep may be lost if you don't have income even if you have it mostly paid for. Also sticking most or all of your monies into one asset, a house does not give one diversification. One of the reasons you see millions of younger families renting today is because they watched millions lose all to almost all in 2007-2009 by believing that houses were the best investments and many lost all of their principle payments.

Bryce

Agreed, just commenting on the fact that 100% of foreclosures do not have mortgages. I am all for getting mortgage paid off asap.

However, I have noticed that insurance companies can be harder to deal with on claims once they realize you do not have a mortgage. I had a flood insurance adjuster, after we had verbally agreed on claim amount, ask for my mortgage company's info. When I told him I owned the property he slammed on the brakes. He left then called later and started re negotiating the $ amount. Took another 30 days, endless estimates, pictures and receipts to get it back up to where he was when he thought he was dealing with me and the bank.

One other possible advantage to having a mortgage is in the event of an eminent domain case. I was low balled on an eminent domain case for a portion of my property once. I argued that the bank obviously valued the property way higher than the bias appraiser the county sent out, based on what I owed at the time and original loan amount . I was also able to argue that my mortgage stated that I could not allow the property to be devalued in any way during term of loan so I was unable to legally negotiate. Ended up with more than 1000% from original ridiculous offer.

Again, I'm all for paying it off asap, but a mortgage can have advantages that are not always obvious.

No on 66% but yes on 34% - currently am putting 2/3 into Roth, paying taxes up front - my growth is tax free.

Lets say your buddy pays $12,000 in interest that he may be able to itemize on his taxes. With the Standard deduction for married people at $24,000 now he may not even gain $4,000 or $5,000 in total deductions over the Standard, however we will let him take a tax break at the top bracket of 37%. So now the end result is he only spent $7.560 on interest. If he paid off his loan he would be spending $0 on interest and still have a $24,000 standard deduction. Keeping a mortgage for a tax deduction makes no sense. Other reasons may. IMHO

I am not sure how all the numbers work . But I hate owing money all the time . We started out with a 30 year loan without the PMI insurance due to 20% down We refinanced to a 15 year loan after 5 years .And than we paid it off in 13 years .Job losses due to company closing followed after the home loan was paid .Than I developed health problems . Because the home loan was no long part of our monthly bills we got through it all . Otherwise it would have been a major problem .The numbers are meaning less to me .I have my home because we paid it off early that might not be the normal .But I did not think it would happen to me either

My wife just ran the numbers on the accounts we mange ourselves (Main investment account and ROTH IRAs) She said we were up a little over 32% in 2019. That's the second best year we have ever had. If we had some major purchase to make this year, I think I would go ahead and borrow the money with interest rates what they are now.

One mistake many make is not paying the CC of EVERY month. We use plastic for nearly every purchase. We get a little cash back and discounted gasoline(8cents /gallon). It also makes it easy to track our spending.

i'm a redneck--got what i want,owe no one,good to go.

do have to wonder at times if somedy the government won't mke it so expensive o be that way that only a few can afford to own land.not n my time but i worry for the kids and grandkids.

Interesting discussion all the way round. My thoughts are that since I have no debt and my mortgage is paid I can stick even more into my retirement investments if I wish. If everything all goes down the drain (2008 - 2009) and we see a major drop again my house is paid for and I will have money on the side to swoop in and make some great deals on everyones toys (traps, guns, etc) that they are getting rid of.

Obama carry over in the third year , Impesssive.