Payoff Ledger Mortgage payoff calculator

Pay down the mortgage, or invest it instead?

An extra dollar on the mortgage earns your rate, after tax, guaranteed. The market may pay more, but only as a guess. The page races both with the same money to the same end date, including the step most comparisons skip: when the loan ends early, the whole payment goes to work too.

Prepay vs invest calculator

Step 1

Your loan

What you owe today, or the original amount if you set the next payment in the past. The rate is the return a prepaid dollar earns.

Step 2

The spare dollars each month. The scheduled payment gets paid on both roads.

Take off taxes and fees. The page compounds it monthly, like the mortgage, so the race is fair. This number is half the decision; the FAQ walks through it.

Decided on the principal road? The payoff calculator turns the habit into a full plan, or set a target month on Debt-free by date. Your loan carries over.

Compare returns

The race at each return you might assume, same money, same end date. Bars to the left: prepaying ends ahead. To the right: investing does. Pick one to run it above.

The same dollars, both roads

The same money leaves your account every month on either road; the only choice is which pocket it lands in first.

Comparison of prepaying the mortgage first versus investing the monthly amount from day one
RoadLoan goneInterest paidAccount at the end
Prepay first, then invest the whole paymentGuaranteed: it earns your rate … … …Ahead at the end
Invest from day one, pay the minimumAssumed: it needs the return to show up … … …Ahead at the end

The interest column is a contract; only your rate sets it. The account column is a guess on both rows: fewer market years on the prepay row, all of them on the invest row. That difference, not the arithmetic, is the real decision.

The schedule, year by year

Open any year to read its payments one by one. Interest is what the loan costs you that month; principal is what comes off the balance.

The CSV holds every payment, one row each, whatever is open here.

Amortization schedule grouped by calendar year, each year opening into its individual payments, with interest, principal, extra principal, and the balance left
YearWhenInterestPrincipalExtraBalance

One honest note: these rows are principal and interest only. Property tax, insurance, HOA dues, and PMI ride along in your real payment, and they do not change the payoff math on this page.

Where a spare $200 goes, ranked by certainty

The sure returns first, then the guaranteed one, then the guess.

Dollar figures use the example: the $400,000 at 6.5% / 30-year loan with $200 a month on trial against a 7% after-tax assumption. Run your own numbers above.

  1. First, the returns nobody debates

    Two moves beat both roads, because both are guaranteed and both beat your rate. An employer 401(k) match pays an instant 50 to 100% on matched dollars. Debt above your mortgage rate (a card at 22%, a car loan at 9%) is this same math with a worse rate. Take the match. Kill the expensive debt. Then the $200 is truly spare.

  2. The mortgage: a guaranteed 6.5%, bought at par

    Every prepaid dollar kills debt that compounds against you at 6.5%. It works like a risk-free 6.5% bond, and for most households that return is already after tax. On the example loan, the $200 habit cancels $111,892 of interest and plants the flag Dec 2050, 5 yrs 7 mos early. No market risk. No fees. No discipline beyond an autopay. The weakness is reach: the money is locked in the house until you sell or borrow it back.

  3. The market: the bigger number, if it shows up

    Invest the $200 at 7% after tax and it grows to $243,994 by the loan’s last month. That beats the prepay road by $19,497. The money stays within reach the whole time: spend it in an emergency, add to it in a good year. But 7% is a bet, not a promise. You must stay invested for thirty years, through every drop. Assume 5% instead and prepaying wins by $45,355. One number decides this race: the one you type in that box.

More questions about this loan

Each answer below uses your loan and what you pay now. Open a tool to change the rest; your numbers carry over.

Prepay vs investYou are here

Make your plan

When does the loan end now?

Jul 2056on the schedule

Try any extra amount, one-time payments or bi-weekly, and watch the date move.

Open the payoff calculator

See every payment?

360 paymentson the schedule

Every payment, split into interest and principal, with the rows an extra amount deletes.

Open the schedule

Debt-free in 20 years?

$454.03more each month

Or pay $61,225 once, today. Any other month works too.

Pick a date

Debt-free by age 65?

$221.89more each month

This line uses an example birthday, Jun 1985. The tool uses yours.

Price it in birthdays

Weigh your options

Pay half every 2 weeks?

$117,496less interest

The loan ends 5 yrs 10 mos sooner. 26 half payments a year equal 13 full payments.

Run the true calendar

Recast after a $50,000 payment?

$319.60less each month

The new payment is $2,208.67. Keep paying $2,528.27 instead and the loan ends in May 2048.

See both roads

Refinance at 5.5%?

20 paymentsto earn back the costs

The usual formula says 25. This line uses an example offer: 5.5% and $6,000 in costs, rolled in, a year from now.

Price an offer

Today’s numbers

Pay off the loan a year from now?

$396,515.26to send that day

Your statement would show $395,529.10. The payoff adds 14 days of interest at $70.44 a day.

Price the payoff

When can PMI stop?

Oct 2033ask at payment #87

Without a request it stops at payment #102. This line uses an example home value of $450,000.

Find both dates

Common questions

Doesn’t the market’s 10% obviously beat my 6.5% mortgage?

The famous 10% is before taxes, before fees, and promised to nobody. The 6.5% is what prepaying pays, after tax, in writing. Put an honest after-tax number in the box and the race gets close: at 7%, investing wins by $19,497 over thirty years. At a delivered 10% it wins by $206,697. At 5% it loses by $45,355. The real matchup is not 10 versus 6.5. It is a guaranteed 6.5 versus whatever you would truly bet on, net of everything.

What after-tax return is honest to assume?

Start with a number you could defend to a skeptic. Then subtract what the account really loses: fund fees, dividend taxes along the way, and capital gains when you finally spend it. That is often one to two points. Sheltered dollars keep more, but the shelter usually has better uses than replacing a mortgage payment. There is no correct number. That is the point: run 5% and 9% and see if your decision survives both.

Why is the return to beat exactly my mortgage rate?

A prepaid dollar and an invested dollar are the same dollar in different jobs. Prepaying removes a balance that compounds at your rate. Investing adds a balance that compounds at your guess. When the two rates match, the roads end the same. This page checks that live on your numbers, and at exactly your rate the ending balances land within a cent of each other after 360 payments. Below your rate, investing loses even when it delivers. Above it, investing wins only if it delivers.

What is the “redirect,” and why does it change the answer?

On the prepay road the mortgage dies early: Dec 2050 in the example. From that month, the whole $2,728.27 that fed the loan gets invested for the remaining 5 years 7 months. Skip that step, as most pitches do, and prepaying looks like it ends at $0 while investing ends with a quarter million. That is a rigged race. Run it honestly and both roads spend the same cash every month to Jul 2056. The gap shrinks to the $19,497 the rate difference actually earns.

Do taxes, deductions, or PMI tilt the race?

Usually toward prepaying. Most households take the standard deduction ($32,200 for a married couple in 2026) and deduct no mortgage interest, so prepaying earns the full rate after tax. The 2025 tax law did lift the cap on state and local tax deductions from $10,000 to about $40,000 through 2029, so more homeowners in high-tax states itemize again. If you do, your rate to beat is lower: about the rate times one minus your bracket. Prepaying never triggers a tax bill; the invest road’s gains get taxed at least once. And if you still pay PMI, extra principal pulls its removal date closer, a bonus this page does not even count. The PMI removal calculator prices it.

So which should I actually do?

In order: take the employer match, kill any debt above your mortgage rate, and hold a real emergency fund. Those beat both roads. Then the summary is simple. Anything guaranteed below your rate loses to prepaying. The market’s edge is real but modest after honest taxes, and you pay for it in risk and discipline. Many households split: enough extra principal to feel the date move, the rest invested. The winning road is the one you’ll still be on in year twelve.

The race …