[corn18]

This question is debated endlessly on all financial fora. 3% money is cheap and you should try to get as much of it as possible. Especially tax deductible 3% money. Heck, inflation will make that 0% real money over a 30 year period. Deduct the interest on top of that and you are making money.

Sounds pretty simple and straight forward, right?

Well, investing is probably 90% emotion and 10% data driven. I plopped $500k into my house last Sept to pay off the mortgage. That was 3.875%, 30 year money. It felt good, but not euphoric. It also removed a line from my budget (mortgage). But it also added 2 lines: real estate taxes and home insurance that escrow took care of before (I hate escrow, BTW, but it was required for my loan). But man, do I look like a genius now! That $500k would have been in this market and lost 30%. I'm a genius! Not really. Just got lucky.

We are moving and building a house. The proceeds from our current house would allow us to pay cash for our new house. But I locked in @ 3.125% for 30 years and just can't pass that up. When all that money is in my account come August or so, we will take a look at what we want to do with it yet again. Pay off the house? Keep the mortgage? Invest? I'm sure the emotions will kick in again and we will pay it off, but who knows. It is nice to live in a house that is paid off. But all I have to do is make any percentage over 0% real to make investing the better option. That seems easy enough until COVID-20 comes along.