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Mortgage vs. RRSP Calculator

Introduction

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.

If the results are close...

Remember that the calculation is based on assumptions and that changing them will yield different results. In the end, if the results are close, then either option may be resonable.