One spare $200 · Two roads · The same finish line
Every extra dollar you put on the mortgage earns your rate: after tax, guaranteed in writing. The market may offer more, but only as a guess. This page races both choices with the same money to the same finish date. It includes the step most comparisons skip: when the loan dies early, the whole freed payment goes to work too.
The ledger correction
Enter your loan, the monthly amount on trial, and the return you’d expect from investing it to see the race.
The invest road’s endgame is one big check: by Aug 2050 the account could cover the $148,690 still owed. The check that clears a loan runs $26.48 a day bigger for every day it rides past the due date. Price the payoff wire for that month.
Committed to the principal road? The payoff calculator turns the habit into a full schedule, or set a target month on debt-free by date. Your loan carries over.
All the math runs in your browser; nothing you enter is stored or sent anywhere. Last updated July 2026.
Identical money leaves your checking account every month on either road; the only choice is which pocket it lands in first.
| Strategy | Mortgage gone | Interest paid | Account at the finish |
|---|---|---|---|
| Prepay first, then invest the whole paymentthe guaranteed road: earns your rate in writing | … | … | …Ahead at the finish |
| Invest from day one, pay the minimumthe assumed road: needs the return to show up | … | … | …Ahead at the finish |
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.
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.
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.
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.
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.
Every tool inherits what you type here. Nothing to re-enter, nothing stored. Dollar figures are the example loan: $400,000 at 6.5% over 30 years.
Make your plan
Payoff calculator
Add $200 a month and watch $111,892 of interest die. Lump sums and milestones too.
Amortization schedule
Every payment, split into interest and principal. $200 a month deletes 67 rows.
Debt-free by date
Pick the month; it finds the smallest extra that gets there. Twenty years costs $454.03 a month.
Before retirement
Paid off at 65 instead of 71 costs $221.89 a month. Priced in birthdays, not dates.
Weigh your options
Prepay vs investYou are here
The market has to beat your mortgage rate after tax. Both roads run to the cent.
Bi-weekly payments
Half-payments every two weeks finish 5 years 10 months sooner. The paid programs get priced too.
Recast
A $50,000 lump can cut the payment $319.60 a month. The lower payment’s price: $137,661.
Refinance
The advertised break-even says 25 payments. The honest ledger says 20. You see both.
Today’s numbers
Payoff amount
The statement says $395,529.10. The check that clears the loan says $396,515.26.
PMI removal
Asking at 80% instead of waiting for 78% keeps $2,805. Both dates, dated.
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 $206,696. 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.
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.
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.
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.
Usually toward prepaying. Since 2018, most households take the standard deduction and deduct no mortgage interest, so prepaying earns the full rate after tax. If you do itemize, 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.
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.