How to use this calculator
- Enter your loan balance, rate and the years left.
- Enter the extra money you have — monthly, a lump sum, or both.
- Choose where you’d invest it and the return you expect.
Both sides spend the same money each month. Once the loan is paid off early, the freed-up payment is invested too, so the comparison is fair to both choices.
Frequently asked questions
Should I pay off my mortgage early or invest?
Compare your mortgage rate with what the money would earn. Putting an extra $500 a month toward a $300,000 mortgage at 6.5% versus investing it at 7%: investing comes out ahead by about $21,258 after 25 years. The break-even return is 6.5%.
What if I’d put the money in CDs instead?
At 4% in CDs, paying off the mortgage wins by $74,939 — a safe return below your mortgage rate rarely beats paying the loan down.
Why is paying off debt called a guaranteed return?
Every dollar of principal you pay off stops costing 6.5% interest, no matter what the market does. Investment returns can be higher, but they come with risk.
Does this include taxes?
No. It compares the two choices before tax. If you itemize and deduct mortgage interest, the effective cost of the mortgage is lower; if your investments sit in a taxable account, your returns are lower. Both shift the break-even point.