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.
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 money leaves your account every month on either road; the only choice is which pocket it lands in first.
| Road | Loan gone | Interest paid | Account 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.
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.
| Year | When | Interest | Principal | Extra | Balance |
|---|
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.
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.
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.
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
When does the loan end now?
Try any extra amount, one-time payments or bi-weekly, and watch the date move.
Open the payoff calculatorSee every payment?
Every payment, split into interest and principal, with the rows an extra amount deletes.
Open the scheduleDebt-free in 20 years?
Or pay $61,225 once, today. Any other month works too.
Pick a dateDebt-free by age 65?
This line uses an example birthday, Jun 1985. The tool uses yours.
Price it in birthdaysPay half every 2 weeks?
The loan ends 5 yrs 10 mos sooner. 26 half payments a year equal 13 full payments.
Run the true calendarRecast after a $50,000 payment?
The new payment is $2,208.67. Keep paying $2,528.27 instead and the loan ends in May 2048.
See both roadsRefinance at 5.5%?
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 offerPay off the loan a year from now?
Your statement would show $395,529.10. The payoff adds 14 days of interest at $70.44 a day.
Price the payoffWhen can PMI stop?
Without a request it stops at payment #102. This line uses an example home value of $450,000.
Find both datesThe 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.
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. 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.
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.