Paying off a mortgage is often more an emotional issue rather than a sound financial decision.

A home mortgage is no longer simply a vehicle for acquiring a house. Financial planners now view mortgages as a way for individuals to optimize their net worth.

Today, more types of mortgages are available than ever before. And the traditional fixed-rate mortgage is the wrong choice for many people, financial advisers say.

"People need to look at a financial plan and their investment strategy when evaluating types of mortgages. If you can earn 10 percent on an investment and the cost of credit is 7 percent, it's better to maximize borrowing rather than liquidate assets for a home purchase," said Marc Crawford, vice president at Merrill Lynch Credit Corp. in Peoria, Ill.

Varouj Mandikian, residential mortgage loan originator at Bank One, agrees.

"Paying off a home mortgage is not always the smartest thing to do," Mandikian said. "Paying a mortgage off quickly sometimes does not make sense."

Like most lenders, Bank One has a wide variety of mortgages.

"We have mortgages here that fit anyone's need. We can deliver a mortgage to 99 percent of the public's needs," he said. "I do not tailor a borrower to meet a mortgage need. I tailor the mortgage to meet the borrower's needs."

One of Merill Lynch's options is an interest-only mortgage repayment plan. For a $100,000 mortgage with an interest-only, seven-year fixed rate converting to an adjustable rate, the home buyer could be over $10,000 ahead after seven years.

Crawford calculates the seven-year, interest-only rate at 7.125 percent compared with 7.5 percent on a 30-year, fixed rate. The monthly payment for the interest-only mortgage is about $105 less than the 30-year plan.

After seven years, the holder of the seven-year mortgage still owes $100,000 on the mortgage while holder of the 30-year, fixed rate owes $91,833, giving the latter a net worth increase of about $8,167.

However, if the holder of the interest-only mortgage invested the $105 saved each month he or she could have $18,849 of invested savings based on the annualized rate of return of the S&P 500 from 1991 to 1997.

Since the average time a home is owned is seven years, Crawford said many people needlessly pay for the guarantee of a 30-year, fixed rate.

Equity in a home is a poorly performing asset because it generates no rate of return on the investment until the home is sold, he said.

Another program available through Merrill Lynch is 100 percent financing.

"This is not readily available on the market, and many people aren't aware of it," Crawford said.

From a financial standpoint, it makes little sense to liquidate assets earning 10 percent and pay capital gains taxes to make a down payment on a mortgage with a 7 percent rate.

Yet another Merrill Lynch option is to pledge securities in a collateral account. The investment still earns dividends and is appropriated only in the case of a loan default.

"It was 1989 when we first went into the mortgage business. It's a different market than it was 10 to 15 years ago," Crawford said.

"An educational process is involved. We try to take the concept of a mortgage and tie it with financial planning and innovative products to come up with something more beneficial than the 30-year, fixed-rate. A lot comes down to how long you expect to own the property. When the average is seven years, you pay a premium for 30-year financing."