Run the math on extra mortgage payments — one-time lump, biweekly, or $X extra per month — and compare against investing the same dollars at your expected return. Shows the break-even and total interest saved.
The "pay off the mortgage vs invest" question is one of the most-asked in personal finance, and the answer depends on three numbers: your mortgage interest rate, your expected investment return, and your marginal tax bracket (which affects the after-tax mortgage rate if you itemize). This calculator runs both scenarios with your actual numbers so the answer is a specific dollar amount, not a rule of thumb.
The math: if your mortgage rate is 3.5% and your expected investment return is 7%, the spread is 3.5% in favor of investing. Over 20 remaining years, putting $500/month extra into investments instead of mortgage principal often produces $50,000+ more wealth. If your mortgage rate is 7%, the spread flips — extra payments win.
But there are non-math factors: paying down mortgage is risk-free (interest elimination is certain); investing returns aren't. Mortgage payoff lowers your monthly obligation, which improves cash-flow resilience if you lose income. And the psychological value of being debt-free isn't trivial. The calculator shows the financial answer; you decide how to weight the non-financial.
Step 1 — Enter mortgage details. Current balance, interest rate, and remaining months. The calculator computes your current monthly principal-and-interest payment from these.
Step 2 — Pick the extra-payment strategy. One-time lump sum, biweekly payments (an extra full payment per year), or $X extra per month. Each strategy has a different impact on time-to-payoff and total interest saved.
Step 3 — Set the investment alternative return. What rate would you expect from a comparable-risk investment? Default is 7% nominal (long-run US stock historical average). For a more conservative comparison, use your bond yield (~5% currently). The output shows both wealth trajectories over time.
Enter your mortgage balance, rate, and remaining term. The calculator shows three extra-payment scenarios head-to-head against an investment alternative at your expected return.
Open the calculator →Two scenarios: (1) Your mortgage rate is higher than your expected after-tax investment return. With a 7%+ mortgage and a conservative 5% investment expectation, extra payments win. (2) You'll lose money to your own behavior if you don't force-save via the mortgage payment. Many people who 'plan to invest the extra cash' don't actually invest it — for them, extra payments win even when the math favors investing.
It's worth one extra full payment per year. You make 26 half-payments instead of 12 full-payments, which equals 13 full payments per year. On a 30-year, 6% mortgage, this typically cuts the term by ~5 years and saves ~$30k in interest. Same result as making one extra payment per year voluntarily. Don't pay your lender extra to set up a biweekly plan — just send an extra payment yourself each January.
Less than it used to. After the 2017 tax law raised the standard deduction to $30,000 (MFJ for 2026), most homeowners don't itemize anymore — the mortgage interest deduction provides zero tax benefit if you take the standard deduction. Run the math both ways: if you do itemize, your effective mortgage rate is (rate × (1 - marginal tax bracket)) — a 6% mortgage at 24% bracket becomes 4.56% after tax.
Calculate the break-even: closing costs divided by monthly payment savings. If you'll stay in the home longer than the break-even (often 18-36 months), refinance. The 'cash-out refi to pay off other debt' strategy is risky — you're converting unsecured debt to debt secured by your home. The mortgage-payoff calculator has a comparison view; the dedicated refinance break-even tool is in the broader Tools section.