PAY DOWN DEBT OR INVEST CALCULATOR

Wondering whether to pay off your debt faster or invest your extra cash? This pay down debt or invest calculator compares the long-term impact of both strategies. Enter your contribution/prepayment amount, interest rate, expected investment returns, and tax information to see which option could leave you further ahead. Use it as a pay down mortgage or invest calculator to weigh mortgage reduction against potential portfolio growth.

Pay Down Debt or Invest

Initial contribution / prepayment (after-tax dollars) Subsequent annual contributions / prepayments (after-tax dollars) Timeline (1–50 years)

Tax Info

Province and income are not required if debt is not tax deductible and you are investing in a TFSA. Use the estimate button or enter your own marginal rate.

Province Income

Marginal tax rate (%)

Debt

Debt interest rate (%) Debt type

Deductible portion (%) If only part of the interest is tax deductible (e.g., home office), set the percentage.

Investing

Account type Expected annual growth rate (%)

Expected income at time of withdrawal

Marginal tax rate at time of withdrawal (%)

Note: For RRSP contributions, this tool grosses up your initial contribution amount and annual contributions to pre‑tax dollars using your current marginal tax rate.

Annual return split: Income vs Capital Gains (%) 40% of annual return taxed as income each year at marginal tax rate; the remainder is treated as capital gains and taxed based on a 50% inclusion.

Future value — Investing

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Future value — Debt prepayment

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More advantageous (after-tax)

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Disclaimer: All information shown is illustrative and for general educational purposes only. Results are estimates and do not account for all variables. This information is not intended to be comprehensive investment, tax, financial, or legal advice, and should not be considered personal investment advice, an offer, or a solicitation to buy or sell investment products. Every effort has been made to ensure the information is accurate; however, accuracy cannot be guaranteed. Tax rules and other factors change frequently, and past performance does not guarantee future results. Investing involves risk, including the potential loss of principal. Hemisphere Capital Management Inc. accepts no responsibility for decisions made in reliance on this information. Please consult a portfolio manager before making any investment decisions. This information is intended for residents of Canada and may not apply in other jurisdictions.

PAY DOWN DEBT OR INVEST CALCULATOR