Pay Off the Mortgage or Invest? Calculator
Same extra money each month: pay down the mortgage, or invest it. See which comes out ahead.
In 25 years, when the loan would be paid off anyway
Investing the extra wins by $29,908
Invested by then, after tax on gains: paying off early $378,913, investing the extra $408,821.
- Paid off early in15 years 11 months9 years 1 month sooner
- Interest saved$125,588
- Your payment$2,026/moprincipal and interest
Pay off early, then investInvest the extra now
The rule of thumb
Paying extra principal earns exactly your mortgage rate (6.5%), guaranteed. Investing wins when your return beats that after tax, which stocks usually do over 10+ years, but not every year.
Beyond the math
Money in investments is there if you lose your job; money in your house isn’t, until you sell or borrow. A paid-off home is peace of mind and lower bills in retirement. Many people split the difference.
Assumes a steady return and the same extra amount every month. Before any mortgage interest deduction.
Important — please read
This calculator is an educational tool. It shows a simple, fixed-rate projection: it assumes your money grows at the same rate every year with no interruptions, and it ignores taxes, fees, inflation, market volatility, sequence-of-returns risk, and changes to your contributions or circumstances. Real investment returns vary widely year to year and can be negative. Past performance does not predict future results.
The numbers shown are hypothetical illustrations, not a forecast, a promise, or a recommendation, and nothing here is investment, tax, legal, or financial advice or an offer or solicitation to buy or sell any security. Paycheck Paradox is not a registered investment adviser, broker-dealer, or tax advisor.
Before making any financial decision, talk to a qualified professional — a licensed financial advisor, CPA, or attorney — who can account for your full situation. You are solely responsible for your own decisions.
Provided “as is”, with no warranty of accuracy or fitness for any purpose. To the fullest extent permitted by law, Paycheck Paradox accepts no liability for any loss arising from use of, or reliance on, this tool.