Should I Invest or Pay Down My Mortgage?

Some problems are great problems to have. Like having extra money lying around and deciding where to save it. That’s a good problem.

If you find yourself in this fortunate position, this calculator may be for you!

The Invest vs. Mortgage Calculator compares two “what-if” scenarios to help understand which approach may be more desirably for your situation.

This is only an estimate as there are a number of assumptions baked in and life doesn’t work like that.

Calculator Assumptions:

1. Consistent mortgage rate for the entire amortization term.
2. Consistent investment return.
3. All money is going to either investments or mortgage.
4. That you will reallocate mortgage payments to investments once complete.

One of the key assumptions, and risks, is in scenario 2. Personal finance is part math and part psychology. The risk is what your mortgage is paid of, will you take your entires mortgage payment and now put 100% of that into investments?

I know I wouldn’t. Human nature and psychology is that I’m going to feel real cash positive and start enjoying my money. I’ve build this into the calculator in the “Mortgage Payment Allocation” percentage.

Scenario 1) Invest Your Money

What if I invested all my cash? How much money would I have at the end of my mortgage term?

Scenario 2) Accelerate My Mortgage Paydown; Then Invest

What if instead, I put all my cash onto the mortgage. Then once the mortgage was paid off, I allocated my mortgage payments and cash to invest at that time?