Mortgage vs. RRSP Calculator
Should I pay down my mortgage or invest in my RRSP?
Your best option depends on the following factors:
- Mortgage rate
- Remaining term on mortgage
- Years to retirement
- Future rate of investment return
- Marginal tax rate
What happens if you put the money in your RRSP?
You get tax-free compounding of your investments and a tax refund that you can re-invest in the RRSP.
What happens if you pay down your mortgage?
You get reduced mortgage payments and you can invest the monthly savings (and RRSP deduction tax refunds) in your RRSP.
Calculation Inputs
Enter the amount to contribute to the RRSP or pay down the mortgage, the expected rate of return, mortgage rate, duration and marginal tax rate to see which option is better: paying down the mortgage or invest in an RRSP.
Mortgage vs. RRSP Calculator
Calculation results...
Assumptions
The Mortgage vs. RRSP Calculator uses the following assumptions in the calculations:
- The mortgage can be paid down without incurring penalties
- The Mortgage rate is compounded semi-annually
- The mortgage is payable monthly at the beginning of the month
- The RRSP deduction tax refund is available immediately for re-investment
- The RRSP deduction limit is sufficient to allow RRSP contributions
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