My husband just received a large bonus payout ($75K). We are aggressively paying down our primary residence, but we still owe $150K (on a $285K mortgage). The interest rate on the mortgage is really low - 2.875%. We have no additional debt. We max out our 401(k)s and IRAs each year, as well as fund our two kids' 529s. I think we should throw the unexpected $75K at the house payment, cutting off five years from our anticipated payoff date and saving around $18K in interest. My husband votes to put it in cheap ETFs, but do so over the course of the next twelve months because he thinks the market is a bit overpriced right now (so basically dollar-cost averaging it out over the next year, unless there is a big pull-back, in which case we would dump a larger percentage in).
I like the peace of mind of being that much closer to FI with not having a house payment (we're hoping to "retire" when we're 40 - 7 years from now), but my husband argues convincingly that with that low of an interest rate, we should just keep plugging away and invest elsewhere where we can make larger returns. In addition, we could use the interest right-off this year with this big (to us anyway) windfall.
What would you do??