How much more did investing make than paying off the mortgage?

For the 1996 family, the only one with both mortgages fully paid off, investing ended with $1,336,903 against $1,188,469: $148,434 more (12.5%).

Does paying off a mortgage early save a lot of interest?

Yes. The 2000 family paying an extra $500 a month paid $254,372 of interest, against $508,333 on the normal 30-year schedule. It still finished $171,446 behind the family that invested.

At what mortgage rate does paying it off beat investing?

In this test, at year 10 the pay-off plan was ahead for every family with a rate of 6.79% or more, and investing for every family at 6.22% or less. By October 2026, investing was ahead at every rate from 3.41% to 8.21%.

What if I sell my investments in a crash to pay down the mortgage?

That did worst. Families that sold in March 2009 and put it all on the mortgage ended behind both plans in 13 of 13 cases; the 2000 family has $418,218, against $741,283 for paying off early and $912,730 for holding on.

Is it smart to split extra money between the mortgage and investing?

In this test, splitting $500 into $250 for the mortgage and $250 invested beat paying off early for 19 of 21 families by October 2026, but never beat investing it all. At the 2009 low it was behind the pay-off plan by about half as much as investing it all.

Test #2 · Published October 18, 2026

Pay off your mortgage early or invest? We tested 21 families on 30 years of real data

By JJ, host of The $10K Test · October 18, 2026 · How the tests work

Watch on YouTube · Subscribe to the channel

My verdict: BUSTED, as a way to end up with more money, for anyone who can sit through a crash without selling.

The short answer: Invest, in this test, for anyone who can sit through a crash without selling. With an extra $500 a month on a $300,000 mortgage, putting it in the S&P 500 was ahead of paying the mortgage down for all 21 families by October 2026. But at the March 2009 low, every family that had started by then was behind, and a family that sold in early March 2009 did worse than both plans.

The key numbers

By October 2026, investing the extra $500 a month was ahead for all 21 families (mortgages taken from 1996 to 2016).
January 2000 at 8.21%, the hardest case for investing: Ramsey's plan led by $27,588 at year 10, but investing was ahead by $171,446 in October 2026: $912,730 against $741,283.
At the March 9, 2009 low, all 13 families that had started by then were behind on investing. The 1996 family's account was down to $55,739 after $79,000 put in.
A family that sold in March 2009 and put it all on the mortgage did worse than both plans in 13 of 13 cases. The 2000 family: $418,218.
Paying it down does save real interest: the 2000 family on Ramsey's plan paid $254,372 of interest, against $508,333 on the normal 30-year schedule.

The claim

Pay off your home early. It's Baby Step 6 of Dave Ramsey's 7 Baby Steps, and his page says it in those words: "Pay off your home early." In his syndicated Dave Says column of June 19, 2023, he went further: "I'd still tell you to pay down the house, even if you were making 20% on your money." To be fair, he does not say stop saving for retirement: his plan puts 15% of income into retirement investments first, plus an emergency fund. This test is about the extra money after that.

Source: Ramsey Solutions, Dave Ramsey's 7 Baby Steps (Baby Step 6); Dave Says column, June 19, 2023

How we tested it

A $300,000, 30-year fixed mortgage taken on the first trading day of January of each year from 1996 to 2016: 21 families. The rate is that January's average 30-year rate from Freddie Mac's weekly survey (3.41% to 8.21%).
Both families spend exactly the same every month: the normal payment plus $500.
Plan A (Ramsey): the extra $500 goes to the mortgage until it's paid off. After that, the full payment plus $500 is invested in the S&P 500 every month.
Plan B (invest): the normal payment, and $500 a month into the S&P 500 with dividends reinvested (the SPY fund) from the first payment.
Net worth = investments minus what's still owed. The house is the same for both families, so it cancels out. Real prices through October 2026.
No taxes, no mortgage-interest deduction, no trading costs. We also tested a family that sold in the 2009 crash, and a split: $250 to the mortgage, $250 invested.

Is it better to pay off your mortgage early or invest?

In this test, investing was ahead by October 2026 for all 21 families. The cleanest case is 1996, the only start where both mortgages are fully paid off: Plan A has $1,188,469, Plan B has $1,336,903, $148,434 more (12.5%). For every $10,000 Plan A ended with, Plan B had $11,249.

Ramsey's plan led at the earlier checkpoints when rates were high. At year 10, Plan A was ahead for 7 of 21 families: every start from 1996 to 2002, with rates of 6.79% to 8.21%. Plan B was ahead for the other 14 (rates of 3.41% to 6.22%). On the day Plan A's house was paid off (13 families got there by October 2026), Plan A was ahead for 3 and Plan B for 10.

With $500 extra, Plan A took 16.83 to 17.83 years to pay off. Paying off in 10 years, as Ramsey's page describes, would have taken $1,428 to $1,622 extra a month on these loans.

What happened to the family that took a mortgage in January 2000?

This was the hardest case for investing: a rate of 8.21%, and Plan B started investing right into the dot-com crash. At year 10, Ramsey's plan was ahead by $27,588. Per $10,000: $10,000 put on that mortgage in 2000 was worth $22,664 after 10 years, guaranteed. The same $10,000 in the S&P 500 was worth $9,282.

Plan A paid off the house in November 2016, still ahead by $17,658. But Plan B already had $198,972 invested that day, and the S&P 500 rose 329.5% from then to October 2026. October 2026: Plan B $912,730, Plan A $741,283. Investing was ahead by $171,446 (23.1%).

Ramsey is right that paying early saves a lot of interest: this family paid $254,372 on his plan, against $508,333 on the normal 30-year schedule. It still finished behind.

What if the stock market crashes after you invest instead?

It did. At the March 9, 2009 low, all 13 families that had started by then were behind on Plan B, and every Plan B account was worth less than the money put in. The 1996 family's account fell from $112,984 in October 2007 to $55,739, after $79,000 put in: $73,702 behind Plan A. That family was behind again as late as March 23, 2020.

The family that panicked did worst. Sell everything in early March 2009, put it on the mortgage, then follow Ramsey: worse than both plans in all 13 cases. The 2000 family that panicked has $418,218 today, against $741,283 on Ramsey's plan and $912,730 holding on.

The leads aren't locked in. A 2008-size drop (55.2%) tomorrow would leave investing ahead for 18 of the 21 families; the 2014, 2015 and 2016 families would fall behind.

Is paying extra on the mortgage safer if you lose your job?

On a normal fixed mortgage, paying extra does not lower the required monthly payment; it ends the loan sooner. In March 2009, the 2000 family on Ramsey's plan owed $81,635 less than the investing family, but had $0 invested that it could reach. The investing family had $34,725: about 15.5 months of $2,245 payments.

Peace of mind is real too, and net worth doesn't count it. The 2000 family on Ramsey's plan has had no mortgage payment since November 2016. The investing family still pays $2,245 a month, scheduled to January 2030.

Does the mortgage rate change the answer?

Paying down a mortgage earns exactly its rate, guaranteed. From January 1996 to October 2026, the S&P 500 grew 10.43% a year with dividends, more than every rate tested (3.41% to 8.21%). Over 10-year stretches, the S&P 500 beat the mortgage for 16 of the 21 start years. The mortgage won for the 1998 to 2002 starts, whose 10 years began around the 2000 to 2002 crash, and 1999 to 2002 also took in 2008.

The latest 30-year rate in the data was 7.40% (week ending October 8, 2026). In this test, at year 10 Ramsey's plan was ahead for every family with a rate of 6.79% or more.

Splitting the extra, $250 to the mortgage and $250 invested, beat Ramsey's plan for 19 of 21 families by October 2026 and never beat investing it all. At the 2009 low it was behind Plan A by about half as much as Plan B.

$300,000 mortgage, extra $500 a month: net worth (investments minus what's still owed)
Start	Rate	Year 10: who's ahead	Oct 2026: pay off first	Oct 2026: invest
1996	7.03%	A +$7,505	$1,188,469	$1,336,903
1997	7.82%	A +$8,761	$1,139,510	$1,195,882
1998	6.99%	A +$6,792	$875,900	$1,086,296
1999	6.79%	A +$34,468	$718,197	$996,730
2000	8.21%	A +$27,588	$741,283	$912,730
2001	7.03%	A +$12,127	$516,683	$849,420
2002	7.00%	A +$11,931	$420,055	$770,860
2003	5.92%	B +$1,179	$277,033	$690,724
2004	5.71%	B +$17,824	$211,403	$605,104
2005	5.71%	B +$25,177	$158,981	$530,533
2006	6.15%	B +$16,707	$118,311	$457,016
2007	6.22%	B +$24,493	$74,047	$393,275
2008	5.76%	B +$42,809	$29,674	$341,907
2009	5.05%	B +$29,224	-$5,462	$283,692
2010	5.03%	B +$44,834	-$30,040	$206,094
2011	4.75%	B +$48,225	-$53,965	$144,898
2012	3.92%	B +$69,688	-$75,593	$96,225
2013	3.41%	B +$30,106	-$94,150	$49,449
2014	4.43%	B +$38,354	-$115,352	-$4,481
2015	3.67%	B +$54,748	-$131,389	-$35,386
2016	3.87%	B +$59,952	-$149,542	-$72,618

A = Plan A, pay off the mortgage first (Ramsey); B = Plan B, invest the extra. Negative numbers mean the family still owes more than it has invested (the house is not counted). No taxes.

The verdict

BUSTED as a way to end up with more money, for anyone who can sit through a crash without selling. Investing the extra was ahead for all 21 families by October 2026. But Ramsey's plan isn't crazy: at rates of 6.79% to 8.21% it led at year 10, and for someone who would have sold in 2009, Ramsey's plan beat what they'd actually have done every time.

What this test leaves out

One country and one 30-year stretch. Only the 1996 loan has run its full 30 years; start years overlap and are not independent.
No taxes and no mortgage-interest deduction. The deduction would favor investing, which pays more interest. Taxes on investment gains would reduce both plans' investments unless the money is in a Roth-type account.
Rates are January averages; a real loan's rate depends on the borrower.
Starts from 2009 had a strong market almost from day one and have 10 to 17 years of data.
Peace of mind and job-loss risk are real and not counted in net worth.

Data: S&P 500 with dividends (SPY); 30-yr fixed rate: Freddie Mac (FRED); net worth = investments minus what's owed; no taxes, no fees. Every number on this page comes from the test results.

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Questions people ask

Is it better to pay off your mortgage early or invest?: In this test, investing an extra $500 a month in the S&P 500 was ahead of paying down a $300,000 mortgage for all 21 families by October 2026. But at the March 2009 low, all 13 families that had started by then were behind.
How much more did investing make than paying off the mortgage?: For the 1996 family, the only one with both mortgages fully paid off, investing ended with $1,336,903 against $1,188,469: $148,434 more (12.5%).
Does paying off a mortgage early save a lot of interest?: Yes. The 2000 family paying an extra $500 a month paid $254,372 of interest, against $508,333 on the normal 30-year schedule. It still finished $171,446 behind the family that invested.
At what mortgage rate does paying it off beat investing?: In this test, at year 10 the pay-off plan was ahead for every family with a rate of 6.79% or more, and investing for every family at 6.22% or less. By October 2026, investing was ahead at every rate from 3.41% to 8.21%.
What if I sell my investments in a crash to pay down the mortgage?: That did worst. Families that sold in March 2009 and put it all on the mortgage ended behind both plans in 13 of 13 cases; the 2000 family has $418,218, against $741,283 for paying off early and $912,730 for holding on.
Is it smart to split extra money between the mortgage and investing?: In this test, splitting $500 into $250 for the mortgage and $250 invested beat paying off early for 19 of 21 families by October 2026, but never beat investing it all. At the 2009 low it was behind the pay-off plan by about half as much as investing it all.

What's in the video

0:00 Intro
0:22 The claim
1:40 How we tested it
2:56 The family that started in 2000
4:21 All twenty-one families
5:19 How 2008 felt
6:44 Peace of mind and job loss
7:46 Why it happened
8:23 What actually works
9:27 The verdict
10:06 Free weekly email + disclosure

Read the script of the video

The words JJ read on camera for this test. The final video may differ slightly.

We gave 21 families the same choice: pay off the mortgage early, or invest the extra money. By October 2026, investing was ahead for all 21. But in March 2009, every investing family that had started by then was behind the pay-it-off family. Some by more than $70,000.

I am JJ, and this is the 10K Test. Every week I take a piece of money advice everybody repeats and test it against real market history. Not opinions. What the money actually did.

Today: pay off your mortgage early. It's step six of Dave Ramsey's seven Baby Steps. His website says:

"Pay off your home early. Imagine how it would feel for your home to be 100% yours. No mortgage payment, just freedom."

And in his "Dave Says" column in June 2023, Dave went further:

"I'd still tell you to pay down the house, even if you were making 20% on your money."

Claims like that are what this channel tests: famous money advice against 30 years of real market data. If you'd rather have math than opinions, subscribe.

To be fair to Dave, he does not say stop saving for retirement. His plan keeps 15% of your income going into retirement first, plus an emergency fund. This is about the extra money after that.

The other side says: the stock market has paid more than your mortgage costs, so invest the extra. Both sound right. So we tested it.

Here's exactly what we did, so you can check it.

Two families. Same house. Same $300,000, 30-year fixed mortgage, at that January's average rate from Freddie Mac's weekly survey. Both spend exactly the same every month: the normal payment, plus $500.

Plan A is Dave's plan: the extra 500 goes on the mortgage until it's paid off. After that, they invest the whole amount every month. Plan B pays the normal payment and puts the 500 into an S&P 500 index fund from day one, dividends reinvested.

We count net worth the simple way: investments, minus what you still owe. The house is the same for both, so it cancels out.

We did that for a mortgage taken out in 1996, in 1997, and every year through 2016. 21 families. Rates from 3.4% to 8.2.

Dave talks about paying off in 10 years. On this loan, that takes about 1,400 to 1,600 extra a month. With 500, Plan A took about 17 to 18 years. And we left out taxes, including the mortgage interest deduction, and trading fees. Best case for both sides.

Start with the hardest test for investing: January 2000, at 8.2%.

Plan B starts investing right into the dot-com crash. 10 years later, in January 2010, Dave's plan is ahead by about $27,600.

In $10,000 terms: $10,000 put on that mortgage in 2000 was worth about 22,700 by 2010, guaranteed. The same 10,000 in the S&P 500 was worth about 9,300. Less than you started with.

November 2016: Plan A makes its last payment. House paid off, 16 years and 10 months in. And on that day, Dave's plan is still ahead, by about $17,700.

But now Plan A starts investing from zero. Plan B still owes about 216,000 on the house, but it already has about $199,000 in the market. And from that day to October 2026, the S&P 500 more than quadrupled.

October 2026: Plan B, $913,000. Plan A, 741,000. Investing is ahead by about 171,000, about 23%. For every $10,000 Dave's family has, the investing family has about 12,300.

"OK, JJ, that's one family." Fair. Here are all of them.

At year 10, Dave's plan was ahead for 7 families, every one that started from 1996 through 2002. Investing was ahead for the other 14.

On payoff day, for the 13 families who've gotten there, Dave's plan was ahead for 3. Investing, for 10.

And by October 2026? Investing was ahead for all 21.

The cleanest comparison is 1996, the only family where both mortgages are fully paid off. Dave's plan: about $1.19 million. Investing: about 1.34 million. 148,000 more, about 12 and a half percent.

Dave is right about one thing: you save a fortune in interest. The 2000 family on his plan paid about $254,000 in interest, half of the normal schedule's 508,000. Real money. It just wasn't enough.

Now the part the "just invest it" crowd skips.

Take the 1996 family. By October 2007, Plan B's account had grown to about $113,000. Then the S&P 500 fell about 55%, dividends included. By March 2009, the account was worth about 55,700, after they had put in 79,000. 13 years of saving, and less than they put in. They were behind Dave's plan by about $73,700.

This wasn't one unlucky family. All 13 families that had started by then, 1996 through 2008, were behind Dave's plan at the March 2009 low. Every one had less in the account than they had put in.

And for the earliest families, it didn't end in 2009. The 1996 family was behind Dave's plan again as late as March 2020. 24 years in.

So, honest question: would you have held on? We tested the family that didn't. In early March 2009, near the bottom, they sold everything, put it on the mortgage, and followed Dave from there. That family did worse than both plans, in all 13 cases. The 2000 family that panicked has about $418,000 today. Dave's plan, 741,000. Holding on, 913,000.

Two things net worth doesn't capture.

Peace of mind is real. The 2000 family on Dave's plan hasn't made a mortgage payment since November 2016. The investing family still pays every month, until January 2030. So far, that peace of mind has cost about $171,000. In March 2009, when Dave's family was ahead by about 47,000, it looked like a bargain.

Job loss cuts the other way, and this surprised me. On a normal fixed mortgage, paying extra doesn't lower the payment the bank requires. It just ends the loan sooner. In March 2009, Dave's family owed about $81,600 less on the house, but that money was locked in the walls. Lose your job, and the bank still wants the full payment. The investing family's account had shrunk to about 34,700. Painful. But that's about 15 months of mortgage payments they could actually reach.

The math underneath is simple. Paying down your mortgage earns exactly your mortgage rate, guaranteed. The stock market isn't guaranteed. But from January 1996 to October 2026, the S&P 500 grew about 10.4% a year, with dividends. More than every mortgage rate we tested.

Over 10-year stretches, the S&P beat the mortgage for 16 of the 21 families. The 5 it lost started from 1998 through 2002, around the dot-com crash, and 4 of them also ran into 2008.

So what do you do? Three things from the same data.

One: be honest about 2009. If you would have sold, Dave's plan beat what you'd actually have done, every single time.

Two: look at your rate. In our test, at about 6.8% and up, Dave's plan was ahead at year 10 every time. At 6 and a quarter or less, investing was. Part of that is the rate, and part is that those high-rate families walked into two crashes. In early October 2026, the average 30-year rate was 7.4%. At that rate, this race is closer than a lot of people make it sound.

Three: you don't have to pick one. We tested splitting it: 250 on the mortgage, 250 invested. The split beat Dave's plan for 19 of the 21 families. It never beat investing it all. But in March 2009, its hole was half as deep. And the 2000 family on the split paid off the house in March 2021, almost 9 years early.

So: pay off your mortgage early instead of investing. Verdict: BUSTED, as a way to end up with more money, for anyone who can sit through a crash without selling.

But it isn't crazy. When rates were 7 to 8%, Dave's plan led for years. And if you'd have sold in 2009, Dave's plan is the better plan for you.

And these leads aren't locked in. If a crash as big as 2008 hit tomorrow, investing would still be ahead for 18 of the 21 families. The 3 newest, 2014 through 2016, would fall behind. And this is one country, one 30-year stretch.

Every week I send a free email with the full numbers behind each test, the tables, the charts, and what we're testing next. Free weekly email at 10Ktest.com.

And tell me in the comments what money advice you want tested next.

This video is for education and entertainment, not personal financial advice. Your situation is different; talk to a professional before changing how you pay your mortgage or invest.

Disclosure: I own my home, and I have a fixed-rate mortgage. I make the regular payments; I'm not paying it off early. I don't own an S&P 500 index fund. I do own some individual stocks, including Apple, which is part of the S&P 500. Nobody paid for this video.

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Education and entertainment only. Not personal financial advice. Your situation is different; talk to a professional before changing how you pay your mortgage or invest. Disclosure: I own my home, and I have a fixed-rate mortgage. I make the regular payments; I'm not paying it off early. I also own rental property. I don't own an S&P 500 index fund. I do own some individual stocks, including Apple, which is part of the S&P 500. Nobody paid for this video.