There are a number of reasons why you might not want to pay off your mortgage but getting a tax deduction isn't one of them.

Let's say your interest rate is 7% and for this example it is interest-only so the entire payment is tax deductible interest. Let's also say you are in a 35% tax bracket. In this over simplified case your after-tax mortgage rate would be ~4.5%.

Paying the bank interest just so you can get a break from uncle sam doesn't make sense.

by:  Jason Whitby | February 01 2010
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I agree with Jason... that you should basically consult with whomever does your taxes for you in order to determine if you are really going to receive a financial benefit from continuing to have mortgage interest to deduct.

Other thing I wanted to add is that if there are other things that you have that can be paid off with that 15K that are at a higher interest rate than your mortgage is... it makes sense to do it. And in these economic times, it certainly is beneficial to ensure that you have 6 months worth of living expenses tucked away in an account for emergencies.

Guess what I'm trying to say is that based on the info that you provided in your post, it's hard to say whether or not you should or shouldn't pay it off now. Take a look at your total financial picture, and start there when deliberating about what to do with 15K.

by:  Marlena Jareaux | February 03 2010
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