Over 20 years
Paying the bond leaves you R307,108 ahead
Debt-free in 14 years 2 months if the extra goes to the bond, or 20 years if you invest it.
Should I invest or pay off my bond?
Compare using the same surplus to pay your home loan down early, or to invest. The result is a rand difference at the end of the remaining term, not a slogan. Returns are an illustration, not a promise.
Your bond
Illustrative prime-linked rate. The September 2026 prime example used here is 10.75%.
Calculated monthly instalment
R15,228
Using an illustrative 9% return, 0.5% fees, and 0% tax drag. Open advanced options to change these, or to type your actual instalment.
The result
Paying the bond leaves you R307,108 ahead
Same surplus, same 20 years. Interest saved by paying the bond early is R730,201, and you are debt-free 5 years 10 months sooner. After the bond is paid off, that instalment is invested for the rest of the term, which is why the bond path still has an investment balance.
Pay the bond
Debt-free
14 years 2 months
Interest paid
R1,424,623
Invested by the end
R1,561,106
Net position
R1,561,106
Invest the extra
Debt-free
20 years
Interest paid
R2,154,824
Invested by the end
R1,253,998
Net position
R1,253,998
Break-even expected return: 11.25%
Above 11.25% a year, investing the same surplus finishes ahead. Below that, paying the bond finishes ahead. This is the gross return, before the 0.5% fee and 0% tax drag.Inflation here is an illustrative 4.5% a year. It scales both end balances the same way, so the recommendation does not flip. Interest saved stays in the rands you would pay.
Balances over time
The bond line stays flat until the loan is gone, then climbs as the old instalment is invested. The invest line compounds the surplus from the start. The higher line at the end is the path with more invested rands.
Get there sooner
What if the extra monthly amount changes?
Same bond, return, fees, and lump sum. Only the monthly extra changes. The rand gap is how far the bond path is ahead. A negative gap means investing is ahead.
| Extra monthly | Debt-free | Bond path ahead |
|---|---|---|
| 14 years 2 months | R307,108 | |
| 12 years 6 months | R408,719 | |
| 10 years 3 months | R559,451 | |
| 8 years 5 months | R689,790 |
Drag to update the comparison. This is the same monthly extra as above, limited here to R0 to R10,000.
Paying the bond leaves you R307,108 ahead
Before you decide
- Keep an emergency fund you can reach without selling investments. Then clear high-interest debt such as credit cards, store accounts, and personal loans before extra bond payments or long-term investing. The debt payoff calculator compares those balances.
- The bond rate is a cost you avoid. An expected investment return is not guaranteed, and a prime-linked bond moves when prime moves. The rate hike calculator shows the instalment change.
- Peace of mind is a real reason to pay the bond even when the spreadsheet prefers investing. Owning the home outright is a different kind of return.
- Extra bond payments are harder to get back unless you have an access facility. This tool does not model redraws, penalties, or a bank lowering your debit order.
- A tax drag of 0% fits a TFSA, within the contribution limits. A retirement annuity can be deductible and is locked away. Neither product is modelled beyond the simple tax drag.
FinWise
See the bond and the investments in one place
FinWise tracks the home loan, the extra you pay, and the accounts you invest into, in rands. The calculator is a sketch. Your own balances are the record.
Explore related resources
Should I invest or pay off my home loan?
How to compare the after-fee return with your bond rate, plus TFSA context and a worked example.
Interest rate hike calculator
See how a prime move changes the monthly bond instalment.
Debt payoff calculator
If you have credit cards or store accounts, compare those before the bond.
When will I become a millionaire?
Sketch how a monthly investment could reach R1 million.
Assumptions
- Default illustration: R1,500,000 still owing, 10.75% a year, 20 years left, R2,000 extra a month, no lump sum, an illustrative 9% investment return, 0.5% fees, and 0% tax drag.
- The bond rate and the investment return both compound monthly (annual rate divided by 12), which is how a South African home loan is usually quoted. A 10% bond and a 10% investment are compared on that same monthly basis.
- You set aside the instalment plus the extra either way. On the bond path the surplus reduces the balance. On the invest path it is invested. Once the bond hits zero, the instalment you no longer pay is invested until the original term ends. Net position is investments minus any bond still owed. The house is not given a price, because you keep it on both paths.
- The fee and the tax drag are simple reductions in the annual return. Net return equals the gross return times (1 minus the tax drag), minus the fee. They are not a full fund fact sheet or a tax return. Today's money uses illustrative inflation of 4.5% a year. This is a planning aid, not financial advice.
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