Definitely a good starting point when making an analysis. I don't know if I would use the effective rate of return which means taking taxes into consideration. Too many variables. Tax rate now vs later vs capital gains, etc.
Just use the mortgage rate vs expected ROR on using the money for investing.
After that you really need to consider personal things. A lot of people say they can handle risk. They invest for 5 years and then the market tanks 20-30%. Now they can't handle it. They sell out at a loss never to venture in again or at least until the market peaks again.
Investing involves so much more than the numbers. The psychology of the investor has a huge role in whether a strategy will be successful or not.
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