I recently set my parents up to refinance their house on a 15 year mortgage with a great rate. They had taken another 30 year mortgage out several years ago to do major upgrades (addition, new kitchen, new bathrooms, etc) to their very dated house. With their budget, they have the ability to pay off the mortgage in about 8-9 years through extra payments. My sister, typically the family “Negative Nancy”, wanted to know if there was benefit to keeping around the interest rate deduction on their taxes. At first that didn’t make sense to me as I’m from the camp of whenever you can pay less interest, you should, even by paying it off early. The longer I thought about it, I wondered if there could be something behind her reasoning?

Both parents are retired from their careers, but my father freelances his drafting/design skills for extra spending money.