This calculator was created in response to an article I read about what to do with extra money at the end of the month. Apply it to the Mortgage or invest it? I wrote an article explaining the exact numbers. This calculator can be used to figure it out for yourself. The extra payment you enter in this calculator will be applied at the start of the plan (not the start of the mortgage, unless those coincide). The calculator assumes that after you’ve paid off the mortgage, the entire mortgage payment along with the extra payment is redirected to investing.
if you’re not sure what to enter try the 250K demo first. The numbers for this demo speak for themselves. That is, until you lower the stock returns to 5.5%. Then math may not outweigh how you feel about debt.
| General information | |
|---|---|
| Start plan (m/d/yyyy) | |
| Extra Monthly payment ($) | |
| Year to measure (more than mortgage duration) | |
| Mortgage/loan information. Enter the original loan information and start date. Extra payments will be applied starting start of the plan. |
|
|---|---|
| Loan Amount ($) | |
| Interest (%) | |
| Period (years) | |
| Yearly Payments (12) | |
| Start date (m/d/yyyy) | |
| Investment information | |||
|---|---|---|---|
| Stock accounts | |||
| Starting balance ($) | |||
| Expected returns (%) | |||
Once all information is added feel free to click Calculate. After the first calculation you can go back and change values and recalculate over and over again.
Good luck reaching your financial goals
Thanks for this article. I pondered many times on what to do. Invest or pay my house loan. As you say, the numbers are clear to see but I appease my emotional side by paying a little bit more. That will already save me around 4 years off my loan!
Cheers
MrRicket
http://www.myricketyroad.com
You are absolutely right. It doesn’t have to be all or nothing, one way or the other. Even paying a little more on your mortgage (once in a while) or monthly can have great impact on the duration of and the interest you pay on your mortgage. Even paying $50 a month extra on a 180,000 loan can reduce your time to pay off by 3 years. The calculator gives you the hard cold facts. It is not capable of putting a price on peace of mind. Good luck reaching your financial goals, Looks like you are well on your way.