Pay Off Mortgage vs. Invest Calculator
Compare the long-term net worth impact of paying extra on your mortgage versus investing that money instead. Now accounts for home appreciation.
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Enter your details and click Calculate.
Understanding the Mortgage vs. Invest Decision
The Dilemma
You have extra money each month. Should you use it to pay down your mortgage faster, guaranteeing a return equal to your mortgage interest rate? Or should you invest it, aiming for higher returns? This calculator helps you decide by looking at your total Net Worth.
How We Calculate Net Worth
This tool models your wealth using the equation: Net Worth = (Home Value - Mortgage Balance) + Investment Portfolio.
- Home Value: We project your home's value growing over time based on your "Est. Home Appreciation." This is important because a paid-off home is a valuable asset.
- Mortgage Balance: We track how fast your loan decreases in both scenarios.
- Investments: We calculate the growth of your extra cash. In Scenario A, once the house is paid off, we assume you invest the entire mortgage payment amount for the remaining years.
Which is "Better"?
Mathematically, investing usually wins if your Investment Return > Mortgage Rate. However, paying off the mortgage early (Scenario A) offers a guaranteed, risk-free return and significant peace of mind.
If the difference in Net Worth is small, the emotional benefit of being debt-free might outweigh the slightly higher numbers from investing. Consider your risk tolerance and retirement goals. Check your retirement progress here.
💡 Need cash from your home?
Compare a HELOC vs. Cash-Out Refinance for your situation.