Your tax free investments are only tax free until you take it out. Then you pay... And who knows what future tax rates will be.
Your house equity isn’t taxed for up to at least $600,000 (if I remember correctly and it might be $1.2 million).
And debt is debt... If debt (leverage) really is such a great thing to have so you can “invest” your money elsewhere then it would make sense to borrow even more so you can “invest” it... Strange how that doesn’t really work so well long term unless you’re Donald Trump...
Then there’s PMI insurance if there isn’t enough equity in your home verses the mortgage amount. Those costs can be substantial. Paying your principle down enough to get rid of it is only a plus.
And last but not least you say you have more liquidity with investments vs. having it tied up in your home. Most investments that have significant tax advantages also have big tax penalties if you remove it before retirement age. If your house is paid off it is easy to get a line of credit against your paid off home quickly in an emergency which is no worse than having a mortgage so that’s hardly a significant barrier to access your “money”.
What a sweet scam that is for the money industry.