Thank you for sharing your thoughts Kerry.
With respect, I disagree with your assertion that the article is irrelevant for most people.
To demonstrate that, let's take a hypothetical person who owns a modest home worth $280,000, less than 75% of the current median US home price.
Say this person bought the home 8 years ago with a 30-year fixed mortgage (the most common type of mortgage in the US by far), financing 82%, the average financed in the US at 3.5% interest.
Our hypothetical homeowner pays $1031/month principal and interest (we'll ignore insurance and property taxes here), and has a current balance of nearly $184,000.
Assume further that this person has the US median income of $80,000/year, and a take-home pay of $60,000/year. I think you'd be hard-pressed to argue that this is very atypical.
Now, we'll start making atypical assumptions that favor your case. First, this person sets aside 15% of their take-home pay each year, so they spend about $51,000/year. Further, this person is unusual in that he's set aside 6 months' worth of expenses in an emergency fund, which is $25,500.
Does it make more sense for this person to use most or all of their $9000/year to pay down their mortgage, or keep to the 30-year amortization schedule and invest the $9000 in a conservative 60/40 portfolio?
In the first situation, they pay $1780/month, paying off their mortgage in 10 years instead of the 22 of their regular schedule. They will have paid $34,300 in interest during those 10 years. In the second, they take the 22 years and pay $80,100 in interest.
However, since they deduct their mortgage interest, the actual out of pocket interest cost net of tax benefits is (assuming a 25% total marginal tax rate) $25,725 vs. $60,075.
Assuming a benign-for-current times inflation rate of 3.5%/year (the long-term historic rate in the US, and about half the current rate), they'd save $34,500 in purchasing power due to the gradual reduction in the value of their payments in the first case, vs. $83,200 in the second.
As a result, if they followed your advice, they'd be financially ahead by about $7250. If they follow my path, they'd be ahead by $22,125.
All the above ignores the investment returns on the $9000/year they'd have invested following my path. If we add those and assume 4% inflation-adjusted returns (since they're investing 40% in low-returns bonds), they'd make about $19,000 more by investing nothing for 10 years and then $1780/month for 22 years than investing $750/month for 22 years. Thus, the bottom line is still $3000 in my favor. If this person would have invested in a more aggressive 80/20 portfolio, on average they'd be further ahead than that.
Now that all that math is out of the way, I will acknowledge that with larger mortgages, the difference in my favor gets bigger, and that for some people the psychological discomfort of having a mortgage on their house outweighs the financial benefits.
