A 57-year-old woman and her 59-year-old husband, married for 26 years, want to pay off their $300,000 mortgage, which carries a 2.75% interest rate and a $2,150 monthly payment. The couple has about $400,000 in savings and short-term investments and does not want to enter retirement owing money. They also have about $1.5 million in retirement accounts, a small pension and will qualify for Social Security after age 65. The home, bought for $410,000 in 2003, is worth about $720,000, their 24- and 27-year-old children support themselves, and the couple has no other debt. The question is whether paying off the mortgage in full is rational despite its low interest rate.
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