We (2 adults , 28yo + 2 kids) live in Sweden so our rules differ a bit from US conditions. Mortgages does not have to be payed down below 75% equity (owning 25% of the investment), i.e. most houses are never payed in full. We can not return the key to the bank if we can't afford payments, we need to sell or it's personal bankruptcy next. Right now we have payed down the mortgage to 20% of the original value or about 25% if you consider rising house prices and inflation. PMI is no longer an issue. A housing bubble is a real possibility considering prices have risen 5-10% a year the last decade with an inflation around 1-2%.
The loan itself is $315K (low considering we live near the capital) and is not locked in. Current rate is around 1.7% after tax breaks. It can burst to 15% or it might go even lower. Over a longer period of time 3-5% (before tax brakes) is probably realistic. We are probably going to move in a couple of years to a cheaper home.
We like the Bogleheads philosophy and the idea of a lazy portfolio. We are considering to use the mortgage as our "bonds".
One idea is to allocate the monthly savings using age-10 in bonds. 20% to the mortgage and 80% to investing. If we had $100 to save this would be 20% to the mortgage and 80% to stocks.
Another idea is to look at the whole portfolio. Right now the house is at 100K equity. We could invest like maniacs the following years to reach 500K in stocks leaving mortgage at 20% and stocks at 80%.
How would you go about paying the mortgage and investing under these conditions? The goal of the game is early retirement.