Should You Pay Off Your Mortgage Faster?

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Evaluate whether to pay off your mortgage faster or invest spare cash. Compare savings, net worth, and the financial impact of each choice with clear insights.

Last update Dec 2024
  • Scenario 1: Pay Mortgage Faster
  • Scenario 2: Invest Instead
  • Which One Is Higher (%)

Compare the impact of paying off your mortgage faster versus investing spare cash. See how Total Net Worth differs for each scenario, factoring in mortgage costs, investment growth, capital gains tax, and remaining mortgage balance.

# Years from Now
Try your numbers:

How much of your mortgage is left to pay?"

A =

The annual interest rate on your mortgage.

B =

The remaining time until your mortgage is fully paid off.

C =

How many years from now do you want to finish paying off your mortgage?

D =

The tax rate applied to any investment gains. This affects the net benefit of investing your money instead of paying off your mortgage.

E =
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Add Input
  • Amount
    Any single amount ($).
  • Cash Flow
    Rent, insurance premium, salary, ...
  • Current Asset
    Real estate, commodity, bonds, ...
  • Installment Loan
    Mortgage, car loan, ...
  • Percentage
    Any percentage value (%).
  • Years / Months
    Any time horizon.
  • Age
    Show "Age" instead of "# Years from Now."
  • Retirement Age (requires Age)
    Enable "Investment Return After Retirement."

Time Value Assumptions

Heads Up!

If you're using Cost Basis (cb) for calculating capital gains:

Please be aware that very few countries currently use inflation-indexed cost basis. Double-check your local tax rules before publishing.

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How is Cash Value calculated?

Total Savings = Saved Mortgage Cost after payoff. Total Net Worth = Invested Total Savings - Capital Gains Tax - Mortgage Balance.

Decisions / Expectations

(Expressions are evaluated at Year 0 only.)

F =
0
G =
0

Calculations

(Expressions are evaluated at every year.)

H =
Ĩ =
J =
K =
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Add Decision or Expectation
  • Buy Asset
    Buy an asset growing at its own rate.
  • Take Installment Loan
    Take a mortgage, loan, etc.
  • Invest
    Receive/Spend a lump sum.
  • Expect to Invest
    Expect to receive/spend a lump sum.
  • Expect Monthly Cash Flow
    Expect to receive/spend cash monthly.
  • Expect Yearly Cash Flow
    Expect to receive/spend cash yearly.
  • Define Variable (Numerical)
    Calculate an intermediate value.
Add Intermediate Calculation
  • Define Variable (Numerical)
    Calculate an intermediate value.
  • Define Variable (Cash Flow)
    Calculate a combined cash flow.