The question. Two households with the same income: one buys this home, the other rents a comparable one. Which has more wealth when the buyer sells?

The renter keeps the cash a buyer spends. The down payment, closing costs and any points stay invested from day one at the return you choose.

Whoever pays less for housing each month invests the difference. Both households spend the same total on housing-plus-saving, so the comparison isolates the housing decision. Early on, owning usually costs more and the renter invests the gap; as rent rises with inflation and the mortgage payment stays fixed, the owner often starts investing instead.

Owner costs: principal & interest, property tax and maintenance (both on the home's current value), insurance (grows with inflation), and PMI. By default PMI ends as soon as you could request cancellation — 80% of the original value, or with an approved valuation 75% of current value after 2 years / 80% after 5. Choose “Automatic only” to assume it runs until the lender must end it at 78% of the original value. Renter costs: rent and renters insurance, both growing with inflation.

Net worth is shown “if sold” — home value minus selling costs minus the loan, plus the owner's investments — because the renter's portfolio is liquid. That's why owning starts behind and needs a few years to catch up.

IRR is the annualized return on the buyer's cash to close, counting every month's cost difference versus renting and the sale proceeds. If your investments would earn more than this IRR, renting comes out ahead; if less, buying does.

Take-home pay (used only for the budget percentages) is estimated with 2026 federal brackets and standard deduction, Social Security (capped per worker) and Medicare, Ohio's 2026 schedule ($332 + 2.75% above $26,050 of income after exemptions for you, your spouse and dependents, using the latest published exemption amounts), and your city rate. Enter your actual take-home to override it.

Not modeled: mortgage-interest itemizing (assumes the standard deduction), capital-gains tax on the renter's portfolio, the home-sale gain exclusion, HOA dues, and changes in property-tax assessments beyond appreciation.

The question. You have the same extra dollars every month. Send them to the lender as extra principal, or invest them?

Same budget in both plans. Each month both households set aside payment + extra. Prepay: all of it goes to the lender; once the loan is gone, the whole amount is invested. Invest: the regular payment goes to the lender and the extra is invested; when that loan eventually pays off, the payment is invested too.

Prepaying earns a guaranteed return equal to your mortgage rate. Investing wins over time when your investments earn more than that rate; prepaying wins when they earn less. The chart shows whether — and when — the lines cross within your horizon.

Net worth = home value − loan balance + investments. Both plans own the same home, so the gap between the lines is entirely the payoff-versus-invest decision.

Not modeled: taxes on investment gains, the mortgage-interest deduction (assumes the standard deduction), and market volatility — the return you choose is applied smoothly every month. Money sent to principal can't be withdrawn without selling or borrowing.

The question. You could sell investments or tap retirement accounts to pay the mortgage off today. Should you?

Funding it costs taxes. The model estimates the extra 2026 tax from the withdrawals you list: short-term gains and traditional IRA/401(k) money are added to your wages (any unused standard deduction absorbs them first) and taxed at ordinary federal rates; long-term gains stack above that at 0%/15%/20%; the 3.8% net investment income tax applies above $250,000 (joint) / $200,000 (single); Ohio taxes it all at 2.75%; and a 10% penalty applies to IRA withdrawals and Roth earnings before age 59½ (exceptions not modeled). Roth earnings are tax-free only if you are 59½+ and the 5-year rule is met. Withdrawals must cover the balance after those taxes.

Keep the mortgage: everything you would have withdrawn stays invested, and you keep making the payment. If the loan matures within the horizon, the freed-up payment is invested from then on. Pay it off: the accounts are reduced by the balance plus taxes (any leftover stays invested), and the full monthly payment is invested from month one.

Net worth = home value − loan balance + investments. Paying off earns your mortgage rate, guaranteed; keeping the money invested wins if it earns more than that over time — and has to overcome nothing, because no tax was triggered.

Important — this is a before-tax comparison. In the “keep” plan, accounts you didn't liquidate are counted at full value, even though traditional IRA/401(k) money and unrealized gains will be taxed when eventually withdrawn, while the payoff plan pays its taxes today. That tilts the chart toward keeping the mortgage. The results show a rough after-tax check that applies today's effective tax rate to those accounts' future value.

Tax figures are estimates (exceptions to the early-withdrawal penalty and other credits are not modeled) — confirm with a tax professional before acting.

The question. A refinance costs money now in exchange for a different payment later. Does it pay for itself before you sell or refinance again?

Two break-evens. The simple break-even is the industry shortcut: closing costs ÷ monthly payment savings. The true break-even also counts how fast each loan builds equity — a fresh 30-year term lowers the payment partly by paying down principal more slowly, so its true break-even is usually later. It also works when costs are rolled into the loan, where the simple version doesn't apply.

Net worth. Keep the loan: home value − old balance. Refinance: home value − new balance + an investment account that starts with any cash-out minus out-of-pocket costs and receives each month's payment difference (positive if the new payment is lower, negative if higher). Cash-out proceeds are assumed to be invested at the return you choose.

Not modeled: the mortgage-interest deduction, taxes on investment gains, prepayment penalties, or escrow changes. Lower payments only build wealth if the savings are actually invested.

The question. You have extra cash at closing. Three mutually exclusive uses: A buy down the rate with discount points (any cash left over is invested), B put it all toward a larger down payment, or C take the minimum down payment at the par rate and invest it.

Same budget for all three. Each month, whichever scenario has the lowest housing cost invests the difference versus the highest, so every dollar is accounted for. Net worth = home value − loan balance + investments.

Effective return (IRR). Points and extra principal are investments too: they pay you back through lower payments, less PMI and faster equity. Each IRR is the annualized return on the cash used in that scenario, measured against investing it (C) over the years you keep the loan. If an IRR is higher than your assumed market return, that use of cash comes out ahead — and it is a guaranteed return as long as you keep the loan.

Break-even. Simple: points cost ÷ monthly P&I savings. True: also counts the extra equity from the lower rate. Sell or refinance before break-even and the points lose money.

PMI is charged on each scenario's own loan amount while the balance exceeds 80% of the original value (the lower of price or appraisal) — or, if you choose “Automatic only,” until it reaches 78%. A larger down payment can remove it entirely — often the most valuable effect of option B. Lenders may also price a lower rate at 75% or 70% LTV; ask, since that is not reflected unless you enter it.

Not modeled: seller-paid points (if the seller pays, option A costs you nothing), taxes on investment gains, and the tax treatment of points.