So, the general thought that floats around a lot of finance forums (including this one) is that if you expect to make a higher percentage return in the market than the percentage of your mortgage, that you should not put any extra money toward your mortgage.

Generally, I have been following this principle, but am about to refi our mortgage and starting to have my doubts. Can someone help me with the math here?

**$285k mortgage, $380ish value home. **

Refi @ 3.25% over 30 years.

Minimum Payment: $1240/mo.

Assumptions

If we cut our Roth IRA contribution to zero, cut our 401k contributions down to whatever our company match was, and counted up the general extra money we have, we would have ~$2500-3000/mo. **I'll stick with $2500 for this example.**

I'll assume a rate of return on potential market gains as 7%

Maths

Paying the minimum payment on the mortgage for 30 years will net $161521 in interest. If, during that time, we invested the $2500/mo "extra" in the market (ignoring pre-tax investments for simplicity), we could make a return of $67,794 (I used yearly compounding) in 7 years.

However, if instead we dumped that $2500/mo into our mortgage, our mortgage would be paid off in 2020 (7 years), and the total interest payment on that would be $34,637... meaning that our $2500/mo "investment" netted us $161,521 (original interest payment) - $34,637 (newer interest payment) = $126,884 savings.

So, Scenario 1, investing all the extra money, nets $67,794 in profit. Scenario 2, dumping it into the mortgage, nets $126,884 in profit over the existing situation.

I know that mortgage interest deductions and market flucuations all make this a more difficult exact answer, but it seems that the common advice doesn't hold water here. Is this because it's a larger mortgage principal in comparison to our "extra" income? I'm not sure where to go from here.