{
  "slug": "mortgage-payoff-vs-invest",
  "title": "Pay Off Mortgage Early vs Invest Calculator",
  "heading": "Pay Off Mortgage vs Invest the Difference Calculator",
  "category": "financial",
  "url": "https://www.revenuelab.fyi/toolbox/mortgage-payoff-vs-invest",
  "summary": "Compare guaranteed interest savings against expected market returns on the same dollars.",
  "description": "Extra cash can either accelerate your mortgage payoff, guaranteeing a return equal to your mortgage rate, or go into the market for a historically higher but uncertain return. This calculator runs both paths with the same monthly amount over your time horizon — one reducing mortgage principal, the other compounding in an investment account — and shows the net worth difference at the end.",
  "formula": "Payoff Path Value = Interest Saved by extra principal. Invest Path Value = FV of monthly contributions at expected return, minus taxes on gains.",
  "dateModified": "2026-09-06",
  "run_url": "https://www.revenuelab.fyi/api/public/calc?tool=mortgage-payoff-vs-invest",
  "inputs": [
    {
      "id": "extraMonthly",
      "label": "Extra monthly amount available",
      "kind": "number",
      "hint": null,
      "default": 500,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "mortgageRate",
      "label": "Mortgage rate",
      "kind": "number",
      "hint": null,
      "default": 6.25,
      "unit": "%",
      "min": 0,
      "max": 15
    },
    {
      "id": "investReturn",
      "label": "Expected investment return",
      "kind": "number",
      "hint": null,
      "default": 8,
      "unit": "%",
      "min": 0,
      "max": 20
    },
    {
      "id": "years",
      "label": "Time horizon",
      "kind": "number",
      "hint": null,
      "default": 15,
      "unit": null,
      "min": 1,
      "max": 30
    }
  ],
  "outputs": [
    {
      "id": "winner",
      "label": "Higher-value path",
      "format": "raw",
      "hint": null,
      "primary": true
    },
    {
      "id": "investValue",
      "label": "Investing path value",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "payoffValue",
      "label": "Mortgage payoff path value",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "diff",
      "label": "Net worth difference",
      "format": "currency",
      "hint": null,
      "primary": false
    }
  ],
  "worked_example": {
    "inputs": [
      "Extra monthly amount available: 500 $",
      "Mortgage rate: 6.25 %",
      "Expected investment return: 8 %",
      "Time horizon: 15"
    ],
    "outputs": [
      "Higher-value path: Invest",
      "Investing path value: $173,019",
      "Mortgage payoff path value: $92,813",
      "Net worth difference: $80,207"
    ]
  },
  "how_to": {
    "title": "How to use this",
    "steps": [
      "Enter extra monthly amount available ($).",
      "Enter mortgage rate (%).",
      "Enter expected investment return (%).",
      "Enter time horizon.",
      "Read your higher-value path on the right — it updates as you type.",
      "Hit Share to keep the scenario or send it to someone."
    ]
  },
  "scenarios": [
    {
      "name": "Conservative",
      "description": "Lower-end numbers — what if things land soft?",
      "values": {
        "extraMonthly": 300,
        "mortgageRate": 3.75,
        "investReturn": 4.8,
        "years": 9
      }
    },
    {
      "name": "Typical",
      "description": "Defaults — the most common real-world setup.",
      "values": {
        "extraMonthly": 500,
        "mortgageRate": 6.25,
        "investReturn": 8,
        "years": 15
      }
    },
    {
      "name": "Ambitious",
      "description": "Higher-end numbers — what if things really pop?",
      "values": {
        "extraMonthly": 800,
        "mortgageRate": 10,
        "investReturn": 12.8,
        "years": 24
      }
    }
  ],
  "limitations": [
    "Results are estimates before tax, fees, and inflation unless an input explicitly covers them.",
    "Rates are treated as fixed for the whole period — variable-rate products will drift from this projection.",
    "This is educational maths, not financial advice. Check anything contractual with the lender or your accountant."
  ],
  "faq": [
    {
      "q": "Isn't investing always the mathematically better choice?",
      "a": "Only if your expected return exceeds your mortgage rate after taxes, and only if you actually stay invested through downturns instead of panic-selling — paying down debt has zero volatility risk."
    },
    {
      "q": "Does this account for the mortgage interest deduction?",
      "a": "No — most homeowners now take the standard deduction, so the model assumes no meaningful tax benefit from mortgage interest. Adjust your effective mortgage rate down slightly if you itemize."
    },
    {
      "q": "What about the psychological value of being debt-free?",
      "a": "That's real but not quantifiable here — many people rationally choose the lower-return path because eliminating a mortgage payment reduces required monthly expenses and stress."
    }
  ],
  "related": [
    "https://www.revenuelab.fyi/toolbox/extra-principal-vs-invest",
    "https://www.revenuelab.fyi/toolbox/mortgage-15-vs-30-year"
  ],
  "license": "CC-BY-4.0",
  "citation": "RevenueLab — Pay Off Mortgage Early vs Invest Calculator (https://www.revenuelab.fyi/toolbox/mortgage-payoff-vs-invest)"
}