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Homeowners' biggest monthly expense is usually their mortgage. But if they get far enough along in their loan term, they may find themselves in the enviable position of being able to pay it off in full early.

If they choose not to, it might mean they are taking the calculated gamble that investing the money will reap long-term returns that surpass the lender's interest.

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Imagine someone named Eduardo, 49, who has $300,000 stored in a savings account — much more than the average savings account balance for adults aged 35 to 44, according to financial data firm SoFi (1). He's also dutifully paid off his mortgage for many years, but still has $180,000 left on the loan.

With retirement just over a decade away, Eduardo is debating the best financial path ahead. Does he invest the cash or focus on paying off his mortgage? It depends on one key variable: the mortgage rate.

A high mortgage rate

As of late June, the average mortgage rate for a 30-year loan stands at 6.4%, according to Freddie Mac (2). If Eduardo is paying off a mortgage with a high interest rate, then the calculation in front of him starts to change.

Assume Eduardo's mortgage rate is close to 6.3%. At that level, financial advisors say it becomes more attractive to wipe out mortgage payments, especially as retirement enters the picture.

LPL Financial devised (3) a similar scenario where a homeowner owing $300,000 with 20 years left on his mortgage loan term starts making an extra $400 payment each month, and pays off the mortgage six years early. They pointed out that the hypothetical homeowner saves $62,000 in overall interest paid to the bank from paying off the mortgage ahead of schedule.

Eliminating regular, fixed-mortgage payments will slash expenses considerably and ease up on sizable income needs. The extra money from getting away from mortgage payments can also become the foundation for an emergency fund.

Some studies (4) also suggest that there are psychological benefits to paying off a mortgage early, such as the emotional relief of having one less monthly payment to make. Just keep in mind that even after paying off a mortgage, homeowners still are required to pay property taxes.