Investment income milestones

Projected fund income is compared with the regular mortgage payment.

Income covers monthly interest--

Mortgage payment covered by investment growth--

The payment-covered date is a cash-flow milestone: modeled monthly investment growth equals or exceeds the regular principal-and-interest payment. It is not a lender payoff date or a guarantee of cash distributions. The separate projected fund-payoff date assumes you use the fund to pay the mortgage; confirm any prepayment terms with your lender.

Estimated payoff paths

Mortgage balance / payoff gap / fund value

Standard mortgage balanceExtra principal balanceInvestment fund payoff gap

The gold payoff gap is the remaining mortgage balance less the projected investment fund. Its labeled endpoint marks the projected month the fund could pay off the mortgage.

Estimated comparison

The same additional monthly cash is allocated differently in each alternative: directly to mortgage principal or to the investment fund.

Payoff pathPayoff timingTime to payoffMortgage interest paid to lenderTime vs. standard

Standard mortgage balance---Baseline

Extra principal payoff----

Investment payoff----

How the comparison works

Choice 1 - pay down principal: the current investment balance is modeled as a one-time principal payment today, and the additional monthly cash is then applied directly to the mortgage. The return is the mortgage interest you avoid, which is effectively guaranteed if the mortgage terms remain unchanged.

Choice 2 - invest the difference: the current investment balance remains invested while the regular mortgage payment continues. The same additional cash is invested monthly. When the projected fund reaches the remaining mortgage balance, the model uses it to pay off the loan. Its outcome depends on the assumed return and is not guaranteed.

Important: this calculator models only non-negative assumed returns. Actual investment values can decline, and taxes, fees, withdrawal timing, or loan prepayment rules can change the result. Confirm your lender's terms and consider a qualified adviser before acting.

Mortgage payoff calculator questions

Should I make extra mortgage payments or invest?

There is no universal answer. Extra principal reduces your loan balance and avoided interest. Investing may have a different result depending on the return you assume, timing, fees, taxes, and risk. This calculator puts the same extra monthly cash in each path so you can compare the estimates.

Does an extra principal payment reduce mortgage interest?

For a fixed-rate mortgage, reducing principal earlier generally reduces the interest that accrues over the remaining loan term. Confirm how your lender applies extra payments and whether your loan has any prepayment rules.

What does the investment payoff estimate mean?

It is the modeled month when the projected investment fund equals the remaining mortgage balance. It is not a lender payoff quote, a forecast, or a guarantee that an investment will earn the assumed return.

What does this calculator leave out?

It is designed for fixed-rate, monthly principal-and-interest mortgages. It does not model escrow, taxes, insurance, investment fees, withdrawal costs, penalties, adjustable rates, or changes to mortgage terms.