Invest vs. Debt Methodology

Invest first: make the required loan payment and invest the saved recurring extra cash plus any one-time cash on its scheduled month. Debt first: apply those same cash amounts to principal until the loan is paid off, then invest the entire former loan-payment budget for the rest of the original term.

Any unused amount in the final payoff month is invested so neither strategy silently loses cash. Contributions are added at the end of each modeled month after that month's market return, matching the site's Growth timing convention.

The randomized comparison uses seeded monthly lognormal returns. The entered median geometric return assumption sets the median compounded return path, while annual volatility determines monthly dispersion. The same monthly return path is applied to both strategies inside each scenario so the comparison is not distorted by different random markets.

The probability shown is the percentage of scenarios in which the invest-first account finishes with a larger value at the end of the original loan term. Seeded scenarios are reproducible estimates, not forecasts or guarantees. Simulations run in a background Web Worker so large scenario counts do not block the page interface.

Accelerating a fixed-rate loan reduces contractual interest with no market volatility. The tool reports the modeled interest saved and earlier payoff from sending the same recurring and one-time cash to principal first.

This should not be interpreted as a universal after-tax investment hurdle rate. Mortgage-interest deductions, investment taxes, account type, employer matches, liquidity needs, and individual risk tolerance can materially change the real-world decision.