[manaboutown]

IMHO it can make sense to highly leverage one's home with a large mortgage and it can make sense to own a home free and clear. It just depends.

When I was young, starting out, I always borrowed as much as possible on a home. I itemized deductions so the interest (and RE taxes) were tax deductible. When I sold a home it had inevitably appreciated and its gain could be deferred upon purchasing another home above its sale price within a certain period of time. I then invested whatever cash I might have put down on the home elsewhere. The internal rates of return on my small down payments were fantastic.

In today's tax environment I no longer itemize deductions so cannot deduct interest on a home mortgage. Granted, mortgage interest rates are historically low, around 2-3% so if one can make more on their investments after taxes that option can still make sense. Given stock market performance over the past dozen years one could have done very well obtaining a mortgage and investing cash that could have paid for a home. Homes too have appreciated so perhaps this has been a win, win, win situation. A couple can sell a home and if certain residency and holding period conditions are met pay no tax on up to $500,000 in gain.

On the other hand at my age of 79 I am no longer comfortable with much debt and am happy to live in a free and clear home. It has greatly appreciated, my stock market investments have appreciated. Although I have left some money on the table I have slept well.