This is a no brainer. Where in this market can one buy a no risk investment paying 4.75%. The answer is no where. Unless there is some high payoff penalty paying off the mortgage is like buying a no risk investment that yields 4.75% a deal that can be found nowhere. Don't get confused by the tax deduction as it means nothing. Take your after tax return of 3.15%(assuming 30% bracket) which is your mortgage payment and save it don't spend it. Keep putting into 401k to get the employer match.Do it this year as taxes will probaly be higher next year
“Where in this market can one buy a no risk investment paying 4.75%. “
Well, for every dollar of 401(k) savings that is matched by the employer, the rate of return is 100%! So as others have noted, it absolutely makes no sense to divert any contributions that would otherwise have gotten an employer match (even if the match is only 25%).