Mortgage Payoff vs Invest Calculator
The classic money debate: pay down your mortgage or invest the difference? This calculator models both strategies over the life of the loan and finds the investment return you would need to beat paying extra principal.
How to use this calculator
- Enter loan balance.
- Enter interest rate.
- Enter loan term.
- Enter extra payment per month.
- Enter expected investment return.
- Your results appear instantly below and update as you change the numbers.
How this calculator works
Strategy A pays the extra against the mortgage, then invests the full former payment for the rest of the original term. Strategy B invests the extra every month for the full term while the mortgage runs its course. The calculator compares the two ending balances and estimates the investment return at which they are equal — the break-even.
Frequently asked questions
Which usually wins?
Investing wins on average when expected returns exceed your mortgage rate, which has been true for stocks versus recent mortgage rates. Paying extra wins on certainty: it is a guaranteed, tax-free return equal to your rate, which is valuable for risk-averse savers or anyone close to retirement.
Why isn't paying extra just a 6.5% return?
It is exactly that — a risk-free, tax-free 6.5% for the money applied. The investing comparison is only fair if you use after-tax returns, since investment gains are taxable while the interest you avoid is not.
Should I invest before maxing my retirement accounts?
Generally yes — retirement accounts offer tax advantages and often employer matches worth more than mortgage prepayment. A common order is: emergency fund, 401(k) match, high-interest debt, then compare extra mortgage payments against taxable investing beyond the match.
Disclaimer: Results are estimates for general information only and do not constitute financial, tax, or legal advice. Figures reflect 2026 rules and may change. Always confirm current limits and consult a qualified professional before making decisions. Official figures: IRS.gov · 2026 limits per IRS tax inflation adjustments.