Pay extra on your mortgage, or invest?
Paying extra saves interest and pays the loan off sooner, but that money could have been invested instead. Most calculators only show interest saved, which always makes paying extra look good. This compares both by what you'd actually be worth: same home, same monthly budget, and once the loan is paid off, the freed-up payment gets invested too.
New to this question? Read the guide: Should you pay off your mortgage early or invest?
- Access to your money. Money paid into the house is hard to get back in an emergency without selling or borrowing; invested money stays available.
- Higher-priority uses. Paying off higher-interest debt, building an emergency fund, or getting an employer 401(k) match usually beats both.
- Certainty. Paying extra earns your mortgage rate with no risk; market returns vary year to year, and a few bad years can change the answer.