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If you have extra cash each month, should it go toward the mortgage or into investments?
We grow the same monthly cash inflow at two different rates: the mortgage rate (interest avoided) and your expected investment return. Whichever ends higher wins.
Strictly mathematically, whichever offers the higher after-tax return. If your investment return beats your mortgage rate, investing wins.
Paying down the mortgage is a guaranteed return equal to the rate; investing in stocks is variable. Many people value the guaranteed return.
Yes — most planners suggest fully funding tax-advantaged accounts and emergency fund first, then split extras between mortgage and taxable investing.
Mortgage interest is deductible only if you itemize. Most filers don't, so treat the rate as the after-tax cost.
Inflation erodes the real cost of fixed-rate debt, which favors investing the extra cash.
Results are estimates for educational purposes only and are not financial advice. Verify with a qualified professional before making decisions.
Last updated October 2026