The Math: Prepaying vs. Investing
This calculator does not simply compare the loan interest rate to stock returns in isolation. It simulates real-life cashflow redeployment.
The Hidden Advantage of Prepaying First: Once your home loan is completely paid off, your original monthly EMI is no longer owed to the bank. You can now redirect both your old EMI and your monthly surplus into high-growth investment portfolios for all remaining years!
Key Factors in Your Decision
- Guaranteed vs Volatile: Debt payoff is a 100% guaranteed return. Stock returns are volatile and cannot be guaranteed over shorter periods.
- Psychological Freedom: Living in a 100% mortgage-free home provides immense emotional security and drastically reduces baseline living expenses.
- Liquidity Needs: Extra payments into a loan are locked in the property equity unless you have a redraw facility or offset account. Calculate offset savings with our ANZ Mortgage Calculator or test part-prepayment with our Home Loan Prepayment Calculator.