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Compares FV of investment vs mortgage savings
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The Pay Off Mortgage Vs Invest Calculator compares the financial outcomes of paying off your mortgage early versus investing the same amount of money. It helps you determine which strategy may provide better long-term financial benefits.
The calculator compares two scenarios:
Details: This comparison is crucial for making informed financial decisions about debt management and investment strategies. It helps homeowners optimize their financial planning and maximize long-term wealth accumulation.
Tips: Enter your current mortgage balance, mortgage interest rate, expected investment return rate, and your investment time horizon. All values must be positive numbers.
Q1: Should I pay off my mortgage or invest?
A: Generally, if your investment return is higher than your mortgage interest rate, investing may be more beneficial. However, consider risk tolerance and emotional factors.
Q2: What are the tax implications?
A: Mortgage interest may be tax-deductible in some countries, while investment returns may be taxable. Consult a tax professional for specific advice.
Q3: Does this consider compound interest?
A: Yes, the calculator uses compound interest calculations for both mortgage savings and investment growth.
Q4: What about risk factors?
A: Paying off mortgage provides guaranteed returns (interest savings), while investments carry market risk. The calculator assumes expected returns without accounting for volatility.
Q5: Should I consider my age and retirement plans?
A: Yes, younger investors may prefer growth investments, while those nearing retirement may prioritize debt reduction for financial security.