There are many scenarios where not buying a home is your better option, as I wrote here: https://themakingofamillionaire.com/15-sure-reasons-renting-benefits-you-over-buying-a-home-50500a45bbc8.
If none of those reasons apply to you, buying is financially smart, as I explain here: https://medium.com/financial-strategy/if-youre-renting-your-home-you-need-to-see-this-1dd55f06dfa.
And if you buy a home with a mortgage, paying it off any earlier than you must is almost always a terrible financial move: https://medium.com/financial-strategy/why-prepaying-your-mortgage-is-almost-always-a-terrible-idea-88fa87977d77.
The gist of it is this:
1. Due to inflation, the dollars you pay back are worth less than the dollars you borrowed. If your APR is 3% and inflation is 3.5%, you're essentially getting paid 0.5% on hundreds of thousands of the bank's dollars just to keep the mortgage going.
2. The tax break reduces your real cost, which makes the above point even stronger. If your overall tax bracket is 30% and your APR is 3%, your after-tax cost is 2.1%. If inflation is 3.5%, your inflation adjusted "income" from your mortgage is 1.4%.
3. When you prepay, you're locking capital in your home equity, which earns zero. If you invest it prudently instead, you can expect around 6-7% annual return adjusting for inflation. Unless your mortgage interest is high (say 5%+), that's an almost guaranteed win.
4. If you prepay, those extra dollars lop off the last payments of your loan, not the coming ones. This means that if you prepaid say 12 months' worth of payments and lose your income and can't keep paying your monthly payments, the bank will foreclose. Had you invested those dollars instead, you would have had enough stashed away to keep paying the mortgage for another 12-18 months (depending on what you invested in, how it performed, and how long it was invested). Further, if you're able to pay so much extra that you can pay off a 30 year note in 8 years, had you invested the money, you could have paid it off with a lump sum earlier than 8 years.
Bottom line, you probably owe your dad an apology. :)
