Pay Off Mortgage or Invest Calculator

2026 rules

Compare extra mortgage payments with investing the same money.

Your numbers

Mortgage balance

Mortgage rate

Years left on the loan

Extra money per month

Expected investment return

Tax on investment gains (at the end)

You itemize and deduct mortgage interest

Your tax bracket (for the interest deduction)

Result

Comes out aheadInvest

Regular payment$1,688.02
Paid off early by10 years 1 months
Interest saved$115,668
Prepay, then invest the freed payment: after tax$365,356
Invest the extra from today: after tax$366,780
Difference at the original payoff date$1,425
Your after-tax mortgage rate6.50%

Prepaying earns exactly your mortgage rate with no risk. Investing has historically earned more, but not every year.

How it works

Paying extra on a mortgage earns your interest rate, guaranteed. Investing earns more on average but varies. The calculator runs both: prepay until the loan is gone and then invest the freed-up payment, or invest the extra from the start.

If you itemize, mortgage interest is deductible, which lowers the real cost of the loan and makes prepaying less attractive.

2026 figures: IRS Rev. Proc. 2025-32 (2026 inflation adjustments).

Questions

Does paying off a mortgage before retirement make sense?

It lowers the income you need each year, which can keep you in a lower bracket and under IRMAA thresholds. It also ties up cash in the house.

What if my mortgage rate is under 4%?

Then even safe investments such as T-bills may earn more than the loan costs.