Should I pay off my mortgage early or invest?

It depends on your mortgage interest rate vs expected investment returns. If your mortgage rate is lower than your expected after-tax investment return, investing typically builds more wealth. If your rate is higher, paying off the mortgage saves more in interest.

What rate of return should I assume for investments?

The S&P 500 has historically returned about 10% annually before inflation (7% after). A conservative estimate of 7-8% is commonly used for long-term planning. Your actual returns will vary based on asset allocation and market conditions.

Does this calculator account for taxes?

Yes. The calculator factors in capital gains tax on investment returns, mortgage interest deduction (if you itemize), and shows after-tax net worth for both strategies.

Mortgage vs Invest Calculator

Assumptions

Mortgage

Loan Type

Remaining Balance

Interest Rate

Remaining Term

Monthly P&I (Principal & Interest)

Auto-calculated from balance, rate & term

Origination

Mortgage Start Date Leave blank to use Year 1, 2, 3…

Original Loan Amount

If set, balance & term auto-calculate (editable)

Extra Cash

Default Extra Monthly

Applied for entire remaining term

Show +$/mo Scenarios on Chart

Extra Payment Periods Add fixed extra amounts for specific date ranges

Lump Sums One-time principal payments on a specific date

Investment

Expected Annual Return

Existing Investments

Tax & Inflation

Capital Gains Tax

Marginal Income Tax

Itemize Deductions?

Inflation Rate

Projection

Show Years Beyond Loan

Include Past (from origination)

Date Labels

Pay Mortgage

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Invest Instead

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Verdict

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Net Worth Over Time

Equity & Investments Breakdown

Year-by-Year Comparison

Year-by-year mortgage vs invest comparison
Year	Mortgage Path Net Worth	Invest Path Net Worth	Difference	Mortgage Path Balance	Invest Path Balance