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[quote=Anonymous][quote=Anonymous]the top federal tax rate is 37%.

treasuries are not subject to state/local tax.

3 week - 30 year treasuries yield 4.45 -5.51%. After tax this is 2.8% - 3.47%. At 24% tax rate it's 3.4% - 4.2%.

If you choose to pay down a dollar of mortgage early instead of buying treasuries at higher after tax yields you are giving up liquidity and taking higher risk while deploying capital at a low return. You could even take a little more risk (investment grade bonds, stocks, etc, but I want to use the pure treasury to illustrate that it's just not time to pay down mortgage early).

If you've won the right to be suboptimal by accumulating a boatload of assets such that you just don'e want to deal with having a mortgage than fine, but if you're asking questions here, you probably haven't done that.

Don't take more risk for lower return. Don't give the banks and mortgage backed securities holders of america back their money before you have to. a low rate mortgage is an asset.

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This is basically correct. The topic of this thread is however recasting on top of prepayment.  With recasting a low interest mortgage, and then making only the lower payments and investing the difference, you in essence take on a low-interest loan (at the rate of your mortgage) to invest in risk-free higher-interest vehicles like treasuries. It's a form of leverage.  In theory, this works as long as your gains over the time frame you're considering is larger than the recasting fee (and as long as treasury short term rates stay this high).  Plus recasting has the side benefit of increasing your flexibility by lowering your required payments. It's a win-win if feasible.

If my mortgage weren't already almost paid off, I'd consider it. I hadn't heard of recasting before this thread.

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