<prompt> Human: I have been told that it is a better financial move to keep a mortgage balance rather than pay it off, because of the tax deduction. Can someone ELI5 why this is the case? If the tax deduction is only on a percentage of income and you are still paying interest on the principle I dont understand why someone who has the capital wouldnt want to pay off the mortgage and then invest the previous monthly payment in a low risk security. Any further explanation would be appreciated.Edit: to give some additional information based on the comments my mortgage is my only current debt 66k remaining that I refinanced at around 4 two years ago. I currently max out the IRAs for both my wife and I and also contribute around 6-8 of our income to our 401ks. I have a college fund setup for my two year old son and 40k in emergency fund. Just want to make sure Im using my free Capital in the most efficient way. Welcome and other thoughts...  <response>: Keeping a mortgage for a tax deduction is mathematically unwise. Imagine you paid 10,000 to the mortgage company in interest this year, and are in a 25 tax bracket. That means you will owe 2,500 less in taxes, thus your interest only cost you 7,500. Now imagine you do not have a mortgage. You are not paying the mortgage company any money, to include interest. The money that WOULD have gone to the mortgage company now stays in your bank account or we you want to do with it, and 25 of that extra money will go to Uncle Sam, which means youll get to keep 75 of what you earned. Keeping 75 of the money you used to spend on your mortgage is way more than keeping 0 of it.If you decide you must have tax break, give that 10,000 to a charitable cause, and you get to keep MOST of your mortgage money, and get the same tax break :The primary reason to pay off your house assuming you have little interest in getting out of debt is arguably the opportunity for more freedom, more financial options, and to essentially lock in your living expenses at a far lower number than you had when you were paying a mortgage. And if you dont like how it feels to be debt free, you can go get a mortgage pretty quickly on that paid for house. 