The Mortgage Investment Freedom Calculator — Pay Extra vs Invest in the S&P 500

Compare paying extra on your mortgage to investing the same extra in a broad U.S. stock index fund (like the S&P 500). Tooltips explain every field; results show decimal years for easy reading.

Loan amount ($) iLoan amount = the chunk of money you borrowed. Extra payments reduce this faster.
Annual mortgage rate (% APR) iAPR is your yearly interest rate. We turn it into a monthly cost in the math.
Term (years) iOriginal mortgage length (30 or 15 are most common).
Extra payment — $/mo (principal-only) iMake sure your servicer applies this as Principal Only so it knocks the balance down directly.
Expected long-run S&P 500 return (%/yr) iA single average for a broad index fund (like the S&P 500), compounded monthly. Try 6%, 8%, 10% to see a range.
Show at horizon iWe compare both paths at the exact month the extra-payment plan would finish the loan.
Debt-free time (with extras) iHow long it takes to pay off when you add the monthly extra. Shown in decimal years (e.g., 12.8 years).
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Plan A horizon
Years Saved iHow many years you shaved off versus the original schedule (decimal years).
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Dollars Saved iTotal interest dollars you no longer pay because you reduced the balance faster.
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Base monthly payment iYour scheduled payment with no extras, based on loan amount, rate, and term.
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Scheduled payment with no extras

Plan A — Pay the Extra onto the Mortgage

Time to payoff and total interest when you add your monthly extra.

Payoff time (years) iHow many years until the loan is fully paid when you add the extra every month.
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Total interest (Plan A) iSum of all interest paid under the extra-payment plan until payoff.
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Mortgage Mood
Add an extra to see the magic.

Plan B — Invest the Same Extra (S&P 500)

We invest the extra monthly in a broad U.S. stock index fund and compare at Plan A’s payoff month.

Investment value at horizon iWhat your extras could grow to by the time Plan A pays off.
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Remaining mortgage (no extra) iWhat you would still owe if you did not make extra payments, measured at the same month.
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Total Extras Invested iThe sum of your monthly extras that were invested (doesn’t include growth).
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Gain over Extras iInvestment value minus your Total Extras Invested — growth on top of your deposits.
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Net after payoff (vs Plan A) iInvestment value minus the remaining mortgage at the same month. Positive = investing ahead; negative = extra payments ahead.
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Who’s ahead? iSimple verdict at the same horizon: “Investing ahead,” “Extra payments ahead,” or “Tie.”
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Simple guide

The choice: Use your extra to crush the loan faster or plant it in a broad index fund (like the S&P 500). We compare both at the same horizon — when Plan A would be debt‑free.

How to use (quick)

  • Enter loan, rate, years, and your extra per month (mark it Principal Only with your servicer).
  • Pick an S&P 500 long‑run average (try 6%, 8%, 10%) to see a range.
  • Press Recalculate.

Reading the big numbers (under the title)

  • Debt‑free time (with extras) — shown as decimal years (e.g., 12.8 years).
  • Years Saved — years removed vs the original plan (decimal years).
  • Dollars Saved — interest dollars you didn’t pay the bank.
  • Base monthly payment — your scheduled payment with no extras.

Why extra early helps

Early dollars matter more. They lower the balance now, so next month’s interest is smaller. More of your regular payment hits the debt. Think snowball in your favor.

Why investing can win sometimes

If the index grows faster than your loan’s rate, planting that money can end bigger. Imagine planting a tree: slow at first, then branches multiply — but weather (markets) can be stormy for a while.

Why “Net after payoff” can dip when you raise extras

Real (if unintuitive) effect, not a broken calc. When you increase the extra payment, Plan A pays off sooner, so our comparison horizon moves earlier. That gives Plan B fewer months to invest (smaller investment value), which can make Net after payoff go down even though you’re contributing more per month. In short: a shorter race can shrink the investor’s finish‑line lead.

Quick rules

  • High loan rate + modest stock return → extra payments usually win.
  • Low loan rate + strong stock return → investing can win.
  • Test 6% / 8% / 10% to see a sensible range.
Disclosure: Educational estimates only. Exact results depend on posting dates, escrow/fees, rounding, and policy. Markets involve risk. Confirm prepayment handling with your servicer.