Prepayment vs. Investment -- A Scenario

Updated July 2009 - Changed the 25% stock rate to be the memorial "Bernie Madoff" rate,
and 30% to be only available to those who do something illegal.

My Comments -- I just love getting on my soapbox

This form allows you to compare what would happen if you took one of two choices with some extra cash you have -- prepaying your mortgage each month, or investing it instead. This tries to take into account your tax situation and assumes you always itemize (even late into your mortgage when your interest will be lower -- I am assuming you give to charities, and pay state and local taxes too!!)

Change these fields as desired:

How much more you have to spend each month
Current monthly payment (principal & interest only)
Current Annual Loan Interest Rate
Current Loan Balance
Loan Interest Deductibility
Expected Long Term Investment Return (%)
Expected Long Term Tax Rate (%) (Federal+State)
Investment Type