Finance Calculators • Canada
Mortgage Prepayment vs Invest Calculator
Compare whether putting extra monthly cash toward your mortgage or investing it may come out ahead over time.
Last updated: May 2026
Estimated comparison summary
Plain-English recommendation
Complete the form and run the calculator.
Warnings and insights
Mortgage prepayment vs investing in Canada
Why mortgage prepayment is like a guaranteed return
Every dollar of principal you prepay reduces future mortgage interest. In simple terms, that can resemble earning a risk-free return close to your mortgage rate.
Why investing may have higher potential but more risk
Investing can outperform over long periods, but returns are uncertain and can be volatile, especially over shorter horizons.
TFSA vs RRSP vs non-registered investing
TFSA growth is generally tax-free. RRSP has tax-deferral characteristics and outcomes depend on deduction value now and taxation on withdrawal later. Non-registered investing usually faces ongoing tax drag.
How taxes can affect the comparison
Tax treatment can materially change net investment outcomes, especially in non-registered accounts where annual taxes can reduce compounding.
When prepaying may be better
Prepaying may be better when mortgage rates are high, risk tolerance is low, and cash-flow certainty is important.
When investing may be better
Investing may be better when expected after-tax returns are meaningfully above mortgage costs and you can handle market ups and downs.
FAQ
Frequently asked questions
Does this include all lender prepayment rules?
No. Lenders can have limits, penalties, and conditions. Confirm your mortgage contract details.
Does this include full RRSP tax modeling?
No. RRSP results are simplified because withdrawal timing and tax brackets can vary.
Disclaimer
This calculator is for educational purposes only and is not financial, tax, investment, legal, or mortgage advice. Results are estimates and may not reflect your personal situation.
Trust, assumptions, and maintenance
Last updated: May 2026
Calculator Accuracy
Methodology summary
This calculator provides a simplified estimate based on your inputs and educational assumptions for planning scenarios.
Accuracy notes
Results are estimates. Actual outcomes can vary based on full tax rules, lender terms, benefit formulas, timing, and personal circumstances.
Assumptions
- Calculations are simplified and educational.
- Results depend on your inputs and scenario choices.
- Tax, benefit, mortgage, and government rules can change over time.
- Users should verify important decisions with official sources or qualified professionals.
When to verify with an official source or professional
Verify before filing taxes, signing mortgages or loans, drawing retirement income, making contribution decisions, or relying on benefits calculations.
Disclaimer
This calculator is for educational purposes only and is not financial, tax, legal, accounting, mortgage, debt, retirement, investment, or government benefits advice.
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