Debt Payoff vs. Investment: What My Cash-Out Calculator Revealed

I refinanced to pull $85,000 of equity with one goal: eliminate $62,000 of high-interest debt and decide what to do with the remaining cash. Should I invest, or should I accelerate the mortgage payoff? The calculators brought clarity—and a surprisingly balanced plan.

Step 1: Consolidation baseline

The debt payoff calculator listed every obligation: credit cards averaging 22.4%, a personal loan at 13.9%, and a lingering auto loan at 6.25%. After entering balances and minimum payments, the tool compared current monthly outflows ($1,782) to the projected cash-out mortgage payment ($1,238). Even after adding $214 to cover the higher mortgage, I netted $330 of monthly relief. That data gave me confidence to proceed.

Step 2: Opportunity cost modeling

Next, I used the reinvestment calculator to weigh three options for the remaining $23,000: lump sum toward the mortgage, invest in a diversified index fund, or hold as a liquidity cushion. The tool projected 10-year outcomes with conservative assumptions—4% mortgage amortization savings versus 6% annual investment growth. Investing produced the highest long-term net worth, but only if I kept making the same principal payments I planned for the mortgage. Liquidity scored lowest financially but highest on peace of mind. Seeing the trade-offs in one dashboard made the decision pragmatic, not emotional.

Step 3: Risk adjustment slider

Real life rarely matches projections, so I used the calculator’s risk slider to simulate market downturns and job loss. Dropping investment returns to 0% for three years still beat the mortgage lump sum as long as I maintained automatic principal-only payments. Losing income for six months stressed the plan, showing I’d need at least $9,000 in liquid reserves to avoid new debt. That insight convinced me to split the funds: $10,000 into a high-yield savings account, $8,000 toward extra mortgage principal, and $5,000 into investments.

Step 4: Execution plan

The tool generated a timeline showing when each action should occur. Immediately after closing, I paid off the debts. Within 30 days I set up autopay for the higher mortgage, transferred $10,000 to savings, and scheduled recurring $400 principal-only payments. On the 45-day mark I opened a new brokerage account and invested the remaining $5,000 in low-cost ETFs. Every step synced with calendar reminders so nothing fell through the cracks.

Lessons learned

1. Run debt and investment scenarios side-by-side. Visualizing monthly cash flow changes prevents regret.
2. Consider risk tolerance. Calculators that stress-test income and markets reveal whether a strategy holds up.
3. Automate follow-through. Timelines and reminders stop you from stalling after closing.
4. Stay flexible. I can always redirect future savings toward the mortgage if markets underperform.

The calculators didn’t dictate a single “right” answer—they showed the math behind each option so I could build a plan that balanced relief, growth, and safety. If you feel pulled between debt payoff and investing, let data guide the choice.