I have a 12 years mortgage. If I have extra money, should I use it to repay early (thus saving time and interests), or should I use that money to make investments, and use the profit from those investments to repay the mortgage (or to something else).

Intuitively, I'd say that if I can find an investment that generates profits greater than the interest of the mortgage I should go for it, but I'd like to back/check this intuition with math.

Moreover, any investment has a degree of risk, while just using savings to repay the mortgage is a safe way of "earn" money (by saving in the interests), is it?

What's the best option? Or in other words, what are the alternatives and how to compare them correctly? (FYI: I'm not in the US, just in case it matters to your answer).


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    Keep in mind that you have to make more on your investments post-tax than you are paying in interest (unless your country has mortgage interest tax deductions like the US) Dec 10, 2016 at 18:55
  • good point @SkinnyJ . My country has those deductions, but unfortunately the tax law is very outdated and there's a really small limit to what I can deduct. However your coment made me think about it, thanks! Dec 11, 2016 at 0:01

1 Answer 1


Your intuition is correct; this depends on how the numbers work out, and to the degree that you can't predict those numbers is a gamble. Only you can decide what level of risk versus return is adequate for you, just as for any other investment decision.

Remember that you can split the difference, by deciding how much you want to prepay vs. how much you want to invest.

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