Not stated is your assumed interest rate on the mortgage. Somewhere around a ~5-6% interest rate tips the scales from being better to wait to being better to pay it off ASAP. In the middle it basically stops mattering. There are also a lot of tax and withdrawal strategy implications that are often too individualized to wrap up in a single statement

My digging for my own scenario with a 3% interest rate on what will be about 140k remaining for about the last 6 years of my 15 year mortgage showed a small improvement in success rate, or a small increase in my safe withdrawal rate. It amounted to the equivalent of getting to retire roughly 2 months earlier as another metric. Not huge, but I'll take it and not look back.

I completely sympathize with those who find it re-assuring to have your house paid off. Having a home base with no strings attached gives much better flexibility to shut down expenses if some sort of calamity happens such as losing a job or getting an illness that prevents working before being FIRE.

For the mortgage payments I assumed about a 4% mortgage. I did some rounding of numbers. So to look at different scenarios with a bit more precise numbers:

(with a 30 year mortgage and 15 years remaining, principal + interest only)

3% - 147k left, annual payment - $12,150

Paid off Mortgage | Not Paid off

Success Rate 92.11% | 92.98%

Median Port. 1.33MM | 1.5MM

Std Dev. 1.66MM | 1.8MM

Avg. 1.88MM | 2.06MM

4% - 155k left, annual payment - $13,750

Paid off Mortgage | Not Paid off

Success Rate 92.11% | 92.98%

Median Port. 1.33MM | 1.48MM

Std Dev. 1.66MM | 1.796MM

Avg. 1.88MM | 2.02MM

5% - 163k left, annual payment - $15,500

Paid off Mortgage | Not Paid off

Success Rate 92.11% | 91.23%

Median Port. 1.45MM | 1.45MM

Std Dev. 1.66MM | 1.79MM

Avg. 1.88MM | 1.98MM

6% - 170k left, annual payment - $17,300

Paid off Mortgage | Not Paid off

Success Rate 92.11% | 90.35%

Median Port. 1.33MM | 1.41MM

Std Dev. 1.66MM | 1.78MM

Avg. 1.88MM | 1.93MM

So the scale for these back tests shows that it does the scale tips around 5-6% but what is the return on risk?

Paid off mortgage | 3% | 4% | 5% | 6% |

coefficient var. .88 .87 .89 .9 .92

For comparison the vanguard total bond fund 15 return/ std dev is .76 and the total market fund is 1.3.

At least in my eyes, when people are looking at fire calcs, they far too often look at the final number or the small fluctuations in survivability rate. Here the variation on a risk basis isn't all that different. It's all within an extremely tight window.

If you change the portfolio from 75/25 to 90/10 the back test reduces the 6% mortgage down to .88 coefficient. This decision doesn't seem to change the numbers much if at all. For people about to FIRE, a reduction in risk for the same outcome seems to be a reasonable decision.