Urgh.. this hurts my head a little, @ender. Maybe it's that I'm not that familiar with the US terminology.. anyway, I don't think that you can get away from the lost opportunity cost of investing for 30yrs vs paying off your mortgage, investing will almost certainly win out and leave you in a better overall position.
Forgive me if I haven't understood you quite right, bit from your post you seem to be suggesting that paying down the mortgage has about the same effect as buying bonds..? That's not the case because - at least when you buy bonds on the secondary market as 99.9% of us do - the value goes up and down, and it is the long term downward trend in yields that has seen such impressive returns for bondholders over the last 40 years way above just the (yield*years-to-maturity).
We currently have a fully paid off home, but are actually looking to trade up some time soon. Normally I am in the "pay off your debts" camp, but none of these decisions exist in a vacuum, and with long term rates so low (here I can fix for 10 yrs at 2.4% or 5yrs at 1.4%) I have to say that I'm more inclined to leverage up to the eyeballs with an interest-only mortgage and invest heavily. Bringing us back round nicely to asset allocation and portfolio construction, if I use a predictable multi-asset strategy like the permanent portfolio there is almost no chance that over the full term of the mortgage I will not substantially outperform the loan rate.
Let me clarify.
Let's say your Mustachian working career is 10 more years. During those 10 years, you prioritize extra savings into paying down your low rate mortgage (additional to tax advantaged accounts).
The return difference matters less in the working years because the interval is so short that the absolute savings amount matters disproportionately much compared to the return difference (over the short term only). It effectively represents a larger bond portion for your AA.
When you are close to retiring, you do a cash out refinance to reclaim as much of the cash you put against the mortgage as possible. Risk here is real estate drops meaningfully.
You use this cash as your bridge money as needed or invest it longer term into stocks, depending on your access to retirement accounts.
The reason this seems reasonable to me is it lowers sequences of return risk while accumulating. From a purely numerical perspective, you'd always want to prefer investing the extra money into the market (vs mortgage principal) but this means a down market doubly hits you.
It's unclear to me if this stability is worth it, or how often it ends up being a good play historically. It certainly feels like you could reduce the likelihood of market impact pushing your FIRE date out in the future and also give yourself a cash cushion to start Roth conversions, etc, once you do FIRE. Depending on your home equity vs spending you may even be able to set aside 5 years expenses and also still dump more into the market for long term investments. The flip side is it likely will extend your FIRE date, at least based on historical market returns in the average case.
But this wouldn't be optimizing for the average but rather trying to mitigate the risks where over the short term of the 10 remaining working career years results in the market performing below bonds.
And over a short (10 years or less) remaining working career, you should nearly always prioritize tax advantaged accounts if you can, particularly pretax. The tax savings alone even if you put it all into a safe investment takes a long time to catch up to current mortgage rate compounding.