Should You Pay Off Your Mortgage or Invest? (A 50-year historical backtest)

It's great to see a wide range of opinions in the comments. Please remember that what feels right for you may not be right for someone else. There is no single right answer for everyone.

Phenomenal analysis! So many YouTubers skim the surface and repeat one another’s simplistic ideas. Finally someone who “gets” data and can do quality analysis! Thank you.

I’ve paid off two mortgages very early (15 and 10 years on 25 year loans) in my lifetime - both with overpayment since day 1. My outlook on life and work changes completely when I’m mortgage free. 🎉

What a brilliant video. So well put together and thought out - every time I thought of a 'what if' at the start of the video, you ended up covering it off later in the video. Very comprehensive and great information, thanks - you've gained a new subscriber!

What a well rounded video. I hope people didn’t stop watching half way through.

Great content. I love the data and analysis. So much more granular and powerful than 99% of financial content out there.

These are the videos I come for! As someone with my own model for back testing - I love these.

Amazing content. No.1 financial YouTube channel! Would be nice to see some content for newer investors on the UK medium salary.

Great video. There are some people in the comments saying they will pay of their mortgage and others calling that out as not being right. However I will also be paying off my mortgage as a priority. At the end of the day it comes down to personal preference and no amount of internet advice that is generalised should impact that. The first step is to educate yourself, make sure you know what decisions you need to make and when. Then do some self reflection and understand your personal circumstances but also what type of person you are. Then know and accept that if you choose to pay off your mortgage, most likely you’re not making the most financially sound decision but if it’s right for you for other reasons and you’re doing it with both eyes open. Then overall you need to step back and give yourself a massive pat on the back, because at the end of the day you have created a situation in your life where you can choose to make these choices, as opposed to most who don’t have the spare cash to do such things. To be clear, I focus on my mortgage after maxing out my investment ISA but again that’s not for everyone.

James you are brilliant - thorough, super clear, realistic and engaging. Thanks for another great video.

Very good analysis indeed! I particularly like your comment in the last part about zooming-out to really look at the total risks the investor is willing to expose himself/herself to, namely job security, health condition, personal stress during the periods of market fall, especially when they are prolonged periods of time.

My first mortgage was taken out in 1987 and was an endowment type. These relied on an investment vehicle to pay off the mortgage when it matured in 25 years time at the end of the mortgage period. Many of us remember the scandal of endowment miss selling when the FCA had to step in and sanction the industry. My endowment tanked and paid out about half the required amount when it matured, thank you Canada Life. Luckily I have already paid off the mortgage some 18 years earlier and was not relying on the endowment. So fantastic concept but relies on managing the investments effectively.

I appreciate the time and attention to detail you put into this. Thank you!

I'm 27, I'm a newly qualified Financial Planner, I personally put much more into overpaying my mortgage than I do into investing. I know that I would very likely be better off allocating more to investments given historical return models, but I also know I'm naturally conservative as a person. For me, the peace of mind of being 40-45 with my mortgage paid off, vs having a much healthier private pension but my mortgage still hanging over me, is a no brainer. I still invest in my retirement plan and for me it's the right balance. It's always helpful to look at these kind of models though, great video James!

Best video I've seen on the subject! Thank you! It would be interesting to see the numbers for 50% paying off mortgage, 50% investing in stocks.

I'm a finance director and would fancy myself as a Treasury expert and I think this video is phenomenal. Well done. Superb analysis.

This is one of the best videos I've ever watched on financial planning

Excellent video, excellent channel. I just discovered it. Thanks for your work James and for sharing your knowledge with us all.

James, I'm 28 and had a completely financially ignorant upbringing (I guess I can be happy at the luxury of not having to worry about money, but also now I'm realising a shame that I didn't know more about finance). I just wanted to thank you for your videos, I have spent countless hours over the past few years educating myself on finance and future planning. Your videos are always my go-to, and have hugely helped me understand personal finance, including starting to invest and buying a house. I'm sure you get loads of these messages, but I just wanted to express my personal thanks for everything you do completely for free. All my friends and family now watch your videos, please keep doing what you're doing.

The hypothetical analysis you did with your client in the last part is a key differentiator in your content and is the value add that financial advisers don’t often demonstrate. The numbers say one thing, but if someone hasn’t considered their human responses to a crisis, the data can obfuscate the real risk. Great video.