Threshold explorer
Pay off debt or invest?
There is no single rate where this flips for everyone. Drag the interest rate and watch the answer weaken, tie, then reverse.
The line marks roughly even ground: 5.50%.
Paying down at 9% is hard to beat
A 9% rate is a certain, tax-free return. A diversified portfolio is expected to earn about 7% over long periods, but with real years of losses along the way. Above roughly 5.5%, most people take the certainty.
Paying down a loan returns exactly its interest rate, guaranteed and tax-free. Investing has a higher expected return, but expected is doing a lot of work in that sentence — the same portfolio that averages 7% over decades regularly loses money over single years.
That is why the crossover sits above the savings rate but below the long-run market average: the extra expected return has to be large enough to pay you for the uncertainty. Around the middle of that band, the honest answer is that both choices are defensible.
Two things sit above this decision either way: making every minimum payment, and capturing an employer match if you have one.
This is one decision. See the whole picture.
The same engine runs a short guided journey that puts this decision in order against everything else competing for the money.
Common questions
One monthly note on rates and repayment
When rates move, the line between paying down debt and investing moves with them. We'll tell you when it does.
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