[tc-sacto]

Why would one pay down the mortgage? If he is in the 25% tax bracket, his true cost of interest is 6.25%-25%tax = 4.68%. Certainly you can invest the money at an after-tax rate of greater than that.

Since 1926 50%stock / 50%bond portfolio has averaged 8%-25%tax = 6%
Since 1970 50%stock / 50% bond portfolio has averaged 10%-25%tax = 7.5%
(as measured by the S&P 500 and Long term Gov Bond)

Both series aren't even aggressive, but moderate portfolios.

P.S. Over 29 years the house, (assuming $300,000 would cost roughly $650,000. The $1,000 after tax, at 6%, would be wourth $934,539: you'd be ahead aprox. $284,539)