Some say it is better to stay in debt on your home so you don’t lose the deduction. Let’s look at the math.
“If you have a home with a payment of around $900, and the interest portion is $830 per month, you have paid around $10,000 in interest that year, which creates a tax deduction” of around $3,000 (Dave Ramsey).
Some say you should keep paying the bank $10,000 so you don’t have to pay the IRS $3,000. Does this make since?
Larry Burket used to say, “You pay me $10,000 and I’ll give you back $8,000 and you’ll get a better deal than the IRS.”
It is better to pay off your home.
If you want the same tax deduction after you pay off your home, just make a $10,000 contribution to the church and you will get the same $3,000 tax deduction from the IRS (Dave Ramsey).