For many people, their home mortgage is the largest and most long-term debt they will ever carry. And because the terms of most mortgages span 15 to 30 years, some people never pay it off entirely. Some people, however, prefer not to carry outstanding mortgage debt into retirement, and make mortgage prepayment a financial goal while still in their peak earning years.

For those who are considering prepaying their mortgage before retirement, several important factors, such as age, debt tolerance, retirement goals and tax issues come into play.

Generally speaking, a mortgage is "cheap" when compared to other sources of personal capital, especially when tax savings are factored in. However, many people would prefer to not carry a mortgage long-term because a substantial part of most monthly mortgage payments goes toward interest and not the loan principal. Over time, this means that a lot of extra money is being paid for the interest on the loan alone and is not making much of a dent in the principal that's owed.

Prepaying a mortgage before retirement makes sense if:

• Doing so will not cut into retirement funds.
• Other financial goals, such as financing a child's college education, won't suffer.
• There are no other major outstanding debts.
• Other sources of investment capital are available. If there are ample opportunities to chase higher returns in real estate or other investments, paying off a mortgage may make sense.

Prepaying a mortgage doesn't make sense if:

• Other financial needs have not been taken care of. For instance, never forgo investing in company-sponsored 401(k) plans just to get rid of a mortgage.
• If moving to another home is a distinct possibility. Why bother prepaying the mortgage if the house will be sold anyway down the line? After all, additional capital may be needed for the next home.

Generally, prepaying a mortgage is a good preparation for retirement. But the younger a person is, the more it makes sense to use the mortgage as a relatively cheap financing source, and focus instead on building up the retirement nest egg to meet retirement goals.