Active Mortgage · Planning tools
Put your monthly surplus to work
Compare two paths for the same extra monthly cash: reduce your mortgage balance or build an investment account while keeping regular mortgage payments.
Set your comparison
Compare after
The model’s comparison at 15 years
The investing path has a higher estimated net position by $19,226.
Direct the surplus to your mortgage
- Regular payment plus surplus
- $2,954
- Regular payment on its own
- $2,454
- Estimated repayment time
- 17 yrs 8 mo
- Interest avoided across repayment
- $110,855
- Mortgage balance at 15 years
- $86,965
- Home equity at 15 years
- $513,035
- Estimated net position
- $513,035
Invest the surplus each month
- Unchanged mortgage payment
- $2,454
- Monthly investment contribution
- $500
- Annual return (example rate only)
- 7.0%
- Investment account at 15 years
- $158,481
- Mortgage balance at comparison date
- $226,220
- Estimated home equity
- $373,780
- Combined equity and investments
- $532,261
Keep the assumptions in view
This illustration uses monthly compounding, a constant mortgage rate and a steady investment return of 7.0% (example rate only). It excludes tax and market fluctuations. Both paths use an assumed home value of $600,000 — 1.5 times the starting mortgage balance, not a property valuation or growth forecast. The paydown path does not invest freed-up payments after the mortgage ends. Investment contributions continue for the full comparison period.
Team Active Mortgage
Monthly investing or mortgage paydown
October 26, 2026
Your inputs
- Outstanding mortgage: $400,000
- Mortgage rate (example rate only): 5.49%
- Remaining amortization: 25 years
- Monthly surplus: $500
- Return (example rate only): 7.0%
- Comparison horizon: 15 years
More than a return comparison
Reducing mortgage debt lowers the interest you owe under your mortgage’s terms. That can bring a clearer repayment date, but money paid into home equity is not the same as cash kept available for emergencies. Accessing it again may require lender approval, costs or a sale.
Account choice and risk
Investing leaves you exposed to changes in asset values. A steady return is useful for comparing assumptions, not for predicting markets. Fees, tax treatment, contribution room and the timing of withdrawals can all change what you keep. Review those details with your financial adviser.
Build a plan around your household
Before committing all surplus cash, consider an emergency reserve and upcoming expenses. Some households split their surplus between debt reduction and saving. Our brokers can explain mortgage prepayment terms; a qualified financial adviser can help with investments and retirement planning.
Questions to consider
How should TFSA room affect this decision?
Available contribution room and your goals are worth reviewing with a financial adviser. Tax treatment may change an investment’s net return, but a TFSA does not remove market risk. This calculator does not model taxes or contribution limits.
What changes when my mortgage renews?
A different mortgage rate changes both your payment and the interest avoided through prepayments. Run the comparison again using your renewal terms, and check whether extra payments fit your household budget.
Can I use these numbers for a home equity line of credit?
Not directly. This model assumes an amortizing mortgage with fixed monthly payments. A line of credit can have variable rates, different repayment requirements and redraw features that this calculation does not include.
What if this mortgage is on a rental property?
The tax treatment of borrowing can change the comparison. Eligible interest deductions depend on how funds are used and your circumstances. Ask your accountant to review those details rather than treating this tax-free illustration as rental-property advice.
Should I withdraw from an RRSP to make an extra payment?
A withdrawal may create taxable income and affect future retirement savings. This model compares new monthly cash flow, not withdrawals from existing accounts. Review withdrawal rules and the tax cost with a qualified adviser first.
Talk through your next step with our brokers
Your lender’s terms, household budget and goals matter alongside the numbers. Our team can help you review your mortgage options.