A number of commenters have asked me why I want to pay off my house early, when I could simply be piling up that cash and putting it in treasury bonds.
This is a good question. After all, cash has an advantage over house: it's liquid. On the other hand, at the moment, interest rates on savings accounts or similar, which is where you want to have your liquid emergency money, are lower than the 4.5% I could get for a 30-year fixed mortgage.
For me, there are a few reasons to pay off the house early:
1) It's a fairly effective form of forced savings. Dave Ramsey is right about this: for most people, the problem is not how to find the most mathematically sophisticated use of their savings. The problem is to save. In theory, you could take the extra payments, invest them wisely, and get a slightly better return. In practice, having cash sitting around is tempting. We see paying down the house as a way of disciplining ourselves to live below our means.
2) Mortgages do cost money. Yes, you get a tax deduction on your interest--but you still have to pay interest. You also get a tax deduction on your charitable donations.
3) I am not as sold as many of my interlocutors on the likelihood of high inflation. If the CPI goes up above the interest rate on my mortgage, I will probably reconsider paying it off early. However, it is simply not true that all the money we're printing today has to show up in a permanently higher rate of inflation. While I expect that there will be a short burst of inflation when the economy starts to recover, the Fed can, and in my estimation will, start to withdraw the liquidity.