An article by Robert Powell of Market Watch entitled, “Should you pay off your mortgage?” provided hand-wringing vacillation between those who might say “yes” and those who might say “no.”

Powell’s article did correctly boil the question down to its essence:

Which is better: To retire without a mortgage or keep the mortgage and retire with a bigger nest egg?

But at this point, August 2013, vacillation is not necessary. For those who are financially savvy, it is better to have a 30-year fixed mortgage and the equivalent cash in appreciating assets. A 30-year fixed mortgage at these interest rates is a great hedge against inflation and an opportunity to leverage appreciation in the markets.

The best reason given not to pay off your mortgage was:

For some, this is a no-brainer. “With current low interest rates that are fixed for a number of years, a retiree can possibly have a better return on the money in a long-term objective portfolio than the 3 or 4% interest payment,” said Michael Callahan, president of Edu4Retirement.

The primary reasons given in favor of paying off your mortgage were because you had your assets in money market or because your interest rate was variable and not fixed. So get a 30-year fixed mortgage and invest in an appropriately balanced portfolio.

Here are some articles on mortgages:

1. Using A Mortgage Wisely
2. Consider Refinancing With A No-Closing-Cost Loan
3. Mailbag: Should I Pay Off My Mortgage Early?

Photo by Megan Marotta