Repayment vs Savings Calculator
Mortgage overpayment vs investing the same cash.
Compare mortgage overpayment savings against investing the same cash at expected investment return. Enter extra and mortgage rate to see both paths.
What this tool does
Enter monthly extra, mortgage rate, investment return, and horizon. The tool shows both paths.
Enter Values
Formula Used
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Disclaimer
Results are estimates for educational purposes only. They do not constitute financial advice. Consult a qualified professional before making financial decisions.
300/month for 15 years: at 4% mortgage rate overpayment saves roughly 74k in avoided interest. Investing at 7% return grows to about 95k. Investment wins by 21k in this case. When expected returns exceed mortgage rate, invest wins; otherwise overpay wins.
Quick example
With monthly extra of 300 and mortgage rate of 4% (plus expected investment return of 7% and horizon of 15), the result is 21,261.54. Change any figure and watch the output shift — it's often more useful to see the pattern than to memorise the formula.
Which inputs matter most
You enter Monthly Extra, Mortgage Rate, Expected Investment Return, and Horizon. Two inputs usually tip the answer one way or the other. Identify which ones matter most by flipping each value past a round threshold and watching whether the winning option changes.
What's happening under the hood
Future value of monthly annuity for each path. The formula is listed in full below. If the number looks off, you can retrace the calculation by hand — that's the point of showing the working.
What the headline rate hides
Lenders quote a rate; what you pay is a blend of that rate, fees, insurance, and any early-repayment penalty built into the product. The figure here isolates the core interest cost so you can compare like-for-like across deals — then add the other costs separately before signing anything.
What this doesn't capture
The figure excludes arrangement fees, valuation costs, legal fees, insurance, and any early-repayment charges — those can add several thousand to the headline cost. Rate changes at renewal for fixed-term deals will shift the picture further. Use this for the core interest/principal math and add the other costs on top.
Repayment vs savings produces a winner based on the inputs provided.
Inputs
This example uses typical values for illustration. Adjust the inputs above to match a specific situation and see how the result changes.
Sources & Methodology
Methodology
Future value of monthly annuity for each path.
References
Frequently Asked Questions
Break-even scenario?
Tax-advantaged accounts?
Mortgage is secured, investment isn't?
Short horizons?
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