Now that’s a smart financial move.

But what about the mortgage interest tax deduction? A tax deduction is no reason to prolong your mortgage payments! Think of it this way—if you were a professional gambler, your gambling losses would be tax deductible. But does that mean a gambler wants to lose money? No way! Still not convinced? Consider the math. Let’s say you are paying $1,000 a month towards your mortgage; $700 goes to interest and $300 goes to principle. You would save around $175 on your taxes. So you want to keep paying $1,000 to the bank so you can save $175? 

Of course not. Math like that will drive you to the poorhouse in a hurry. As a friend of ours once said, “The problem with tax deductions is that they are like paper towels. You have to spill your own milk (make the payments) before they help you sop up some of it.” But what if you plan to sell your house? If you sell your house, you walk away with the equity—and the equity increases for every dollar you pay down on the mortgage. 

When you sell the house, the cash is yours, whether you plough it into another home or just shove it in your pocket. But doesn’t it make sense to borrow against your home when interest rates are low? Whether you are borrowing to pay down your credit card balance, play the stock market, or travel to Tahiti, borrowing against your home is still borrowing—period. It is not saving, it is not smart, it is not savvy. A second mortgage or a home equity line of credit is dangerous, because it gives the mortgage lender the right to take your house away if you get behind on your payments. 

So just pay down your mortgage, and bask in the knowledge that one day you will be completely, contentedly debt-free. But what if you don’t own a home? Should you rush right out and buy one? Should you decide your future is hopelessly lost forever and crawl into your apartment bathtub and pull a mattress over you? No and no. If you don’t own a home, it may make sense to buy—or it may not. Buying a home is not the right choice for some people. 

And renting is perfectly fine—on one condition: Renters still need to keep saving. The money you would have used to pay down your mortgage should go into your savings. If you’re not a homeowner, you will need extra money when you retire so you’ll be sure to have enough to cover the cost of an apartment.