But it might work again in the future, so it is worth knowing about and costing.

The trick was to have an interest-only mortgage that was backed by municipal bonds. With the tax breaks and interest rates that existed in the late 90's, you made more from the munis than you spent on the mortgage, so buying more munis was a more effective way to pay down the house than paying off the mortgage. And in case of need, the munis are perfectly liquid.

With current interest rates this strategy no longer pays, it is better to pay off the mortgage. You lose the liquidity benefit, but you get a better rate.

Except that if you're running a business, then running a mortgage is smart. The idea is that owning 4 profitable hotels in the clear is not as good as having 8 profitable hotels with mortgages on them.

Cheers,
Ben