Enter your existing mortgage and an extra amount you could put toward either strategy. We compare both over the same time horizon — your loan's original remaining term — for a fair, apples-to-apples result.
⚠ Estimates only, not financial advice — see the note below the results for details. Most existing US homeowners have rates well below today's new-purchase rates — enter your actual rate for an accurate result.
Put the extra amount toward principal each month; once paid off, invest the freed-up payment for the rest of the term.
Keep paying the mortgage on schedule; invest the extra amount every month instead, for the full remaining term.
Each line already includes every adjustment above it — this isn't a list to add up. Compare using the bottom line only.
Estimates only, not financial advice. "Pay Off Early" directs the extra amount to principal, shortening the loan; once paid off, the entire former payment (base plus extra) is invested for the rest of the original term. "Invest the Difference" keeps the original payment schedule and invests only the extra amount, for the full original term. Both are compared over the same time horizon for fairness. This tool doesn't model the mortgage interest tax deduction — under current law the vast majority of filers take the standard deduction instead of itemizing, so the deduction only changes the math at the margin for a minority of homeowners; if you reliably itemize, consider lowering your entered rate slightly to reflect your after-tax cost of the loan.
Pay Off Early vs Invest the Difference takes your existing mortgage and one extra monthly amount, then runs both strategies through four stages over the same time horizon — your loan's original remaining term.
Pay Off Early's active-phase payment is your original payment plus the extra amount, until the loan is paid off. Invest the Difference keeps the original payment unchanged and sets the extra amount aside to invest instead.
Extra principal payments shorten the loan and cut total interest substantially — often by tens of thousands of dollars, even on a modest monthly extra amount.
Invest the Difference starts compounding its extra monthly amount right away. Pay Off Early has nothing extra to invest yet during this phase, since that money is going toward principal instead.
Once the loan is paid off early, that entire former payment becomes available to invest for whatever time remains until the original term would have ended — a much larger monthly amount than Invest the Difference's steady extra contribution, just compressed into fewer years. This stage is usually where the comparison is decided.
No. Pay Off Early vs Invest the Difference gives a directional estimate to help you think through a decision, not a substitute for a financial advisor. It doesn't account for your emergency fund, other debts, employer retirement matching, or risk tolerance — all of which matter for this decision beyond the raw numbers.
This tool is about an existing mortgage, not a new purchase — and most existing homeowners are nowhere near today's rates. Recent data (Redfin, based on FHFA's National Mortgage Database) found 85.7% of mortgaged US homeowners have a rate below 6%, 76.1% below 5%, and 57.4% below 4% — a "rate lock-in" effect from the ultra-low-rate years of 2020-2021. If you took out or refinanced your mortgage more recently, at a higher rate, replace this with your actual rate — the answer changes a lot depending on where your rate falls.
Because timing matters as much as the rate gap. Paying off early guarantees a return equal to your mortgage rate immediately, then frees up your entire former payment — a much larger amount — to invest for whatever's left of the original term. Investing the smaller extra amount for the full term can lose out to that late, large, compressed investing window even when its rate of return is higher, especially when the rate gap between your mortgage and the market is modest. A wider gap, a smaller extra payment relative to your loan, or a longer time horizon all tend to favor investing more clearly.
Yes — that's a real benefit this tool doesn't price in. A paid-off home is guaranteed shelter regardless of what markets do, and eliminates a required monthly payment, which matters if your income becomes less certain. Investing instead carries market risk and no guarantee of the return you enter. Purely financial optimization isn't the only lens worth applying to this decision.
Roughly 90% of US taxpayers take the standard deduction rather than itemizing, and for 2026 that's $16,100 for single filers. Mortgage interest only provides a tax benefit if you itemize, and even then, only the amount that pushes your itemized total above the standard deduction actually helps — a calculation that depends heavily on your state and local taxes and charitable giving, which this tool doesn't ask about. If you reliably itemize, you can approximate the effect by entering a slightly lower mortgage rate to reflect your after-tax cost of borrowing.
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Data: 2026