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Mortgage vs RRSP calculator

Should I pay down my mortgage? Or contribute to my RRSP? Or do both by contributing the extra to an RRSP and then using the tax refund to pay down the mortgage?

Now you can find out with our mortgage vs rrsp calculator. The first scenario shows the effect of putting additional contributions into your RRSP. The second scenario shows the effect of putting the additional contributions towards your mortgage, then once the mortgage is paid off, putting those additional contributions into your RRSP. And the third scenario shows the effect of contributing the extra into your RRSP first, then using the tax refund towards your mortgage.

Of course there’s more going on than just the numbers. Interest rates may be guaranteed with your mortgage for a period of time, but are likely not guaranteed with your RRSP; if so you are comparing guarantees with non-guarantees. You may also have a different comfort level with respect to maintaining debt vs. paying it down earlier. These and other factors mean you should use this calculator as just that – a calculator. You should still seek advise from a professional financial advisor (which this site does not purport to be).
This calculator is dynamic and will automatically update the results table as you click between the various fields (questions).



Canadian Mortgage/RRSP calculator
Current mortgage balance: $
Current monthly mortgage payments: $
Mortgage Interest Rate: %
RRSP Interest Rate: %
Years to display (1-99):
Additional new monthly contributions
(this is the new additional amount
that will either be applied to the mortgage or RRSP): $
Your marginal tax rate: %

RRSP
Additional contributions and tax refund all to RRSP
Mortgage
Pay down mortgage first.
Both
Contributions to RRSP, tax refund used to pay down mortgage
End of Year Mortgage RRSP Mortgage RRSP Mortgage RRSP
1 35,126.33 2,470.12 32,693.26 0.00 35,078.33 2,422.12
2 30,105.35 4,990.10 25,165.67 0.00 30,007.90 4,893.13
3 24,932.61 7,560.95 17,410.56 0.00 24,784.22 7,414.02
4 19,603.53 10,183.68 9,421.06 0.00 19,402.65 9,985.79
5 14,113.37 12,859.36 1,190.07 0.00 13,858.42 12,609.47