BinnaBurra
Back to BinnaBurra

Should you pay extra into your bond or invest?

There is no universal answer. Compare the debt interest cost, investment-return assumption, liquidity needs, tax position and the impact on your full financial plan before choosing.

Bond or invest comparison

Compare repaying your bond faster with investing the same extra monthly budget. Illustrative assumptions, separate from your full financial plan.

Illustrative assumptions, not a forecast. Explore without an account; sign in only when you want to save.

Bond and monthly budget

Both paths use the same total monthly budget. After the bond is paid off, freed repayments go into investments.

Number between 1 and 100000000.

Number between 0 and 30.

Whole number between 1 and 40.

Number between 0 and 1000000.

Number between -20 and 30.

Whole number between 1 and 40.

Results update when you finish changing a field. You can also use Update comparison.

The same budget, two possible paths

Calculated regular bond payment: R 9 983,80 / month. Both paths use R 11 983,80 / month in total.

After either bond is paid off, its entire monthly budget goes into investments. Figures are nominal rand after 20.0 years, before tax.

Scroll across the table to compare both paths. You can also focus the table and use the arrow keys.

Bond versus investment comparison
At the comparison datePay extra into bondInvest the extra
Investment balanceR 1 463 558,50R 1 178 040,83
Bond still owedR 0,00R 0,00
Total bond interest paidR 801 855,66R 1 396 111,73
Investments minus remaining debtR 1 463 558,50R 1 178 040,83
Bond paid offMonth 151 (12.6 years)Month 240 (20.0 years)
How the comparison works

The regular payment amortises the starting bond over its remaining term. Interest and investment growth use the annual rate divided by 12, applied monthly, with payments and contributions at month-end. Rates stay constant. The final partial repayment leaves the rest of that month’s budget available to invest.

Investment returns are assumed after fees, before tax, and are not guaranteed. Tax, inflation, bond charges, early repayment penalties and access-bond rules are excluded. Property value is left out because it is the same in both paths; the net figure is not your total net worth. This is not a tax-aware financial plan.

Consider emergency cash, access to your money and your lender’s terms alongside these numbers. Review important decisions with a qualified financial adviser. Projections are estimates, not financial advice.

Keep this version

Save these inputs to your account. This creates a separate comparison and leaves your financial plan unchanged.

Only the inputs are saved. Reopening calculates the results again.

Prefer a file without an account? Download the inputs, results and limitations as text. It contains the numbers you entered; keep it somewhere private.

Build my full financial plan

How to model it in BinnaBurra

  1. Add your bond balance, rate and regular repayment.
  2. Create one scenario with an extra bond payment and another with the same investment contribution.
  3. Compare projected debt, cash flow and net worth using the same starting assumptions.

Build your own scenario

Use your own balances and assumptions. BinnaBurra provides projections, not financial advice.