1) Total years remaining on loan. The longer you have to pay off the loan, the higher the probability is that you can beat the payoff option.

2) Tax situation before and in retirement. Your taxes in retirement are likely to rise if you have to increase your withdrawals to make house payments. This reduces your net earnings on your investments and must be accounted for in your calculations. Other people may be in a tax situation where only part or none of the extra withdrawal results in any tax penalty.

3) Equity/bond ratio of your investments. If you believe that your house is the same as a bond so you will only invest your payoff nest egg in bonds (equity/bond=0), then you reduce the odds that you can beat the payoff option significantly. A high equity/bond ratio improves the odds over a long enough period, but adds risk that you may not feel comfortable with.

4) Mortgage rate. Obviously the lower the rate, the better the odds of beating the payoff option.

To use FIRECALC to look at this problem, you have to look over a time period equal to the payoff period. Make the initial portfolio value equal to your mortgage payoff amount. You begin using an additional fixed withdrawal not adjusted for inflation that is equal to your annual payment plus tax burden. You can approximate the value of the tax deduction value by averaging the deduction amount over each of three periods over the life of the loan and subtracting the appropriate amount (include an additional income) using a fixed value at each interval period. For example, for a 30 year fixed mortgage, compute the average deduction in years 1-10, 11-20 and 21-30. Include the appropriate additional income starting at the beginning of the loan period, then reduce it at each 10 year interval. You should use the appropriate equity/bond ratios that you would anticipate investing in. You can then look at the probability of success and average terminal values. The probability of success tells you the percentage of years since 1872 that keeping the mortgage would have been financially profitable. The detailed results show you exactly when the failure years were. And the terminal values show you how much money you would have made over payoff. Notice that a failure does not mean you lose your house. It simply means that the house will cost you more than it would have cost you had you paid it off at the beginning.

In reality, the above simulations underestimate your odds of beating the payoff historicaly by a small amount. This is due to the additional safety and investment value that the payoff investments bring to your overall portfolio. A more detailed simulation can be run that looks at your overall situation (including all investments) and then running a comparison with a detailed simulation that incudes payoff.