Should I Pay Off My Mortgage Early?

Published 2026 - 4 min read

Prepaying a mortgage is a guaranteed, tax-free return equal to your interest rate. Investing can beat it over time, but not every dollar is equal. The honest answer depends on your rate, your tax situation and how much cash you need available.

The case for paying it off

Your mortgage rate is a certain cost. Every extra principal payment earns that rate for the rest of the loan with zero risk. For most borrowers at 6% or higher, few investments offer a guaranteed 6% after tax.

The case for investing instead

A diversified stock portfolio has historically returned more than most mortgage rates over long horizons. If your mortgage is at 3-4%, investing the extra cash may build more wealth - provided you hold for the long term and can stomach the swings.

Don't forget liquidity

Money in your home is hard to get out. If you prepay and then need cash, you'll borrow at a higher rate. Most advisers suggest funding an emergency fund and retirement accounts first, then attacking the mortgage.

Run the numbers

Use the mortgage extra payment calculator to see exactly how much interest an extra payment saves and how many years it trims.

A middle path exists for the undecided: split the difference. Pay a modest extra amount toward principal each month so you shorten the term and build a cushion of equity, while still investing the rest. It is less extreme than either pure strategy, keeps liquidity on your side, and lets you revisit the split as rates and your situation change - the calculator above shows exactly what any extra payment is worth in years and interest saved.