Should you use your extra money to pay down your mortgage or invest it?
How this comparison works:
Option A: Apply your lump sum and monthly extra payments toward your
mortgage principal
Option B: Invest the same lump sum and monthly amounts at your expected return
rate
This is the money you can either use to pay down your mortgage OR invest
One-time amount available to either pay down mortgage or invest
Monthly amount available to either pay extra on mortgage or invest
Annual percentage return (e.g., 8% per year)
Calculating over 300 months (25.0 years)
Using $0 lump sum + $2,000/month to pay extra principal
Investing $0 lump sum + $2,000/month
Investing your extra money would generate $1,081,549 more than paying down your mortgage early