I agree with Joe that you seem to have your stuff together.
However I can't disagree more otherwise. You are getting a loan at such a cheap rate that it would be almost impossible to not substantially beat that rate over the next 15-20 years. You paying off your home early might give you warm fuzzy feeling but would make me queezy. This is a MONEY website. Make money.
For our purposes let's say your home is worth 500k, you can get a fixed rate loan at 3% over 30 years, and you can earn 7% on your investments per year. Note that I have earned 12% on mine the past 15 years so I am being pretty conservative.
So let's not get into your other stuff because that is fine. Let's focus just on that 500k - your house.
Interest only Loan for the whole thing-
- you would pay $2966 a month- estimate
- over the 30 year loan you would pay almost 1.1 million.
- your investment would earn almost 4.1 million.
- You would clear about 3 million after paying your loan.
- This doesn't include tax breaks on the loan.
- So let's just say 3 million
The flip side is you pay off your house. Your house could be worth 400K in 30 years. Probably not but neighborhood could decline, house not kept up, or whatever. Your house is not a risk-free investment. And it fluctuate in many areas more than the stock market. But let's just say your area stays OK or normal. In 30 years you can expect your house to be worth somewhere between 700k to 1.5 million. Let's just say you did GREAT with your house. Guess what? At 1.5 million selling price you still lost 1.5 million because of your decision plus sunk your money into a less liquid option.
Let the bank take the risk on your house price. The warm fuzzy feeling will be there when you realize you could rebuy your house two times over in 6-7 years.
Note: I know my example doesn't use your exact numbers. I am just showing what your true cost is of making a decision in the most extreme way. I am guessing you have great credit and might be able to find an all interest loan at 3%. So not doing this is costing you 1.5 million over 30 years. Given a lower home price after 30 years or a higher rate of return this easily be much more. IF you earned 12% over the 30 year period you would be costing yourself 16 million - do the math. Now you are talking about doing something in-between. Which means you will basically have the same risk factors with less return.