Calculators / Mortgage vs Invest
Mortgage Payoff vs Invest
You have some spare cash each month. Do you throw it at the mortgage to be debt-free sooner, or invest it and let the market compound? This shows the book's historical odds that investing wins at your mortgage rate, then compares both paths month by month. Everything runs in your browser.
Returns use 1996–2026 history (S&P 500 and intermediate-term Treasuries, VFITX), after a 0.5%/yr dividend-tax drag; 20% capital-gains tax is applied to investment gains at the end.
Pay down mortgage · Invest instead · the gap
How this works
The odds come from the book's Figure 6.1: 20,000 block-bootstrap paths of 1996–2026 nominal monthly returns, with a 0.5%/yr dividend-tax drag and 20% capital-gains tax at the end. For each mix, the book reports how often investing the extra beat prepaying the mortgage, across mortgage rates. The bond leg is intermediate-term Treasuries (VFITX, 5 to 10 year maturities), the same bonds Bengen used. This page reads the book's published odds and interpolates to your exact rate; it does not re-run the simulation in your browser.
Your own numbers run both paths on the same monthly budget, your normal payment plus the extra. Pay down: the extra is added to every payment until the loan is gone, then the whole amount is invested for the rest of the term. Invest instead: you make the normal payment and invest only the extra from day one. Net worth is your investment pot (after 20% tax on gains) minus any remaining mortgage. The invest return is your chosen mix's 1996–2026 average, minus the 0.5% dividend drag.
Simplifications: the "your own numbers" path uses a constant return, monthly compounding, and no early-payoff penalties. Illustrative, not advice.
Illustration only. Accuracy not guaranteed. A simplified model for education, not financial advice and not a recommendation to choose one option over another. Past odds do not predict your result. See the disclaimer.