Interesting comments @brookylnguy. I'm trying to think through the implications and produce an example.

I entered the following variables into my calculator:

- $280,000 mortgage
- Mortgage rates: (3.75% 30-yr) (3.00% 15-yr) (2.85% 10-yr)
- 6% annual return on investments
- 25% marginal tax rate
- $2,684 in either mortgage payments or investments each month, plus an additional $2500 in supplemental investments. The amount of the supplemental investment increases by 4.00%/yr
- $50,000 starting investment portfolio
- 2% rate of future inflation

I'm also going to assume that I need $35,000 to live on annually (this and all numbers below are inflation adjusted), before paying any costs associated with my mortgage (if applicable).

Using these assumptions, the calculator says that if I take a 15 year mortgage, I'll have $35,253 available at the start of year 16 (4% of my $881,332 portfolio), and my mortgage will be paid off. So, I could retire at this point.

Using the 30 year mortgage, my investments would be sufficient to produce an annual income of $41,387 at the start of year 16. But my inflation adjusted mortgage payments for the year bring that total down to $29,894.

I still want to retire at this point, so I need a way to cover the remaining $6,106 in annual non-mortgage living costs.

One option would be sell investments and pay off the mortgage. In this scenario, my investment portfolio would drop in value from $1,034,677 to $902,981. This happens to be $21,649 more than the value of my investments at this point if I took a 15 year mortgage. Since I would have no mortgage, my annual available income would jump from $29,894 to $36,119--$866 more than it would be with the 15 year mortgage.

The more complicated option (from a math perspective) is that I keep the 30 year mortgage open, and just spend down part of my investment earnings each year to cover the mortgage payments.

As you stated, the large investment portfolio will be large enough to cover these costs while still growing, so this is presumably the best approach. I would like to see some specific numbers though.

I unfortunately don't think I'll have time to do this before I go out of town for a work trip through Sunday, but I'm going to try and add a feature to the calculator to select a fire date/annual living cost, which lets you see how different options break down.