Nobody knows what the market will return, so this works the question backwards: it tells you the return investing would have to beat for the two choices to leave you equally well off. You decide whether that figure is plausible.
This is for you if you have money spare each month or a lump sum sitting there and cannot decide whether it should go into the mortgage or into investments.
It is a simple projection from the figures you enter, for general information and education only - not financial advice, and not a recommendation either way.
Two things come first, though. If you are carrying credit card or other high-rate debt, or you do not yet have a few months of expenses in cash, this is not your first question - the order of operations tool is. Neither choice below beats clearing an 18% card.
It turns on one number nobody knows: what your investments will actually return. So rather than asking you to guess, the calculator works out the return investing would need for the two choices to leave you equally well off. You judge whether that figure is plausible - a question you can answer.
Because only one side is taxed. Interest you never pay is not income, so nothing is deducted from it, while investment earnings generally are. The rule is your rate divided by one minus your tax rate. The defaults above - a 6% mortgage rate and 20% tax on earnings - are round mid-range figures rather than a recommendation, and both are yours to change. At those figures the investment would need about 7.5% a year before tax to draw level; change either input and your own break-even moves with it.
On a fixed rate, close to it: every unit of principal repaid early saves exactly the interest it would have accrued, untaxed, and nothing can take it back. On a variable rate the saving is real but its size moves with your rate, so it behaves more like a return tracking short-term rates. That distinction matters more than it sounds - outside the United States most mortgages are either variable or fixed only for an initial two to five years - the Reserve Bank of Australia put fixed-rate loans at under 5% of its market in February 2026, and British, Irish and New Zealand fixes expire and revert. Pages calling this guaranteed without qualification are generally written for the American thirty-year loan, where it is true.
Not for this decision. You own all of the property already - your lender holds a security interest, not a share - so whatever the price does, it does the same thing under either choice and cancels out. That is why there is no property input.
Four things break that: crossing a loan-to-value threshold can unlock a cheaper rate or end mortgage insurance, and only paying down gets you there sooner; if prices fall, being further ahead is a buffer against negative equity; invested money can be reached, mortgage overpayments generally cannot, unless your lender offers redraw; and where mortgage interest is deductible your effective rate is lower than the headline.
Whatever you can defend, and keep it the same kind of number as your mortgage rate: before tax and before inflation. Over 125 years global equities returned about 5.2% a year above inflation, per the UBS Global Investment Returns Yearbook; the 10% figure often quoted is American, before inflation and before tax. Pairing a nominal mortgage rate with an inflation-adjusted return understates investing by whatever inflation turns out to be.
That is the answer. If the winning option changes between a poor return and a strong one, the arithmetic is not deciding this and more precision will not help. What remains is whether a probably-larger investment balance is worth more to you than a cleared mortgage and one less fixed cost. Higher-rate debt and a cash buffer usually come first either way - the order of operations tool ranks every destination.