What Tech Debt Interest Calculates
The hours it will take to fix a shortcut in 6, 12, or 18 months — compounded by everything built on top of it.
Tech Debt Interest answers one question: how much more will this shortcut cost to fix if I wait?
Tech debt compounds. Each feature built on a hack multiplies the fix cost. Current cognitive load:
effective_growth = base_growth × (1 + velocity_factor) payoff_hours = initial_fix × (1 + effective_growth)^months if payoff_hours < 2 × initial_fix → STABLE if payoff_hours < 4 × initial_fix → GUARDED else → CRITICAL (red-band, rewrite territory)
- Set honest growth: 1-3%/mo dead code, 5-10%/mo active, not 15-20%.
- Input code velocity — features landing on the hack per month.
- Compute payoff_hours at current wait and at wait + 6 months.
- If ratio ≥ 4× initial_fix, schedule refactor this quarter.
- Attach payoff number to the ticket. Load:
load unmeasured .
Quick answer
Tech Debt Interest answers one question: how much more will this shortcut cost to fix if I wait?
▸ Key Specs
- ▸ Formula: payoff_hours = initial_fix × (1 + effective_growth) ^ months.
- ▸ Effective growth compounds with code velocity — 5%/mo stable code, 8-12%/mo actively-developed modules.
- ▸ Code velocity multiplies the drag. Load on the team:
load unmeasured . High-churn modules hit red-band within a year. - ▸ Heatmap bands: green (manageable), yellow (watch), red (rewrite territory).
- ▸ Order-of-magnitude tool. Forces scheduling conversation, does not predict the fix to the hour.
▸ Worked Examples
- 6hr fix, 8%/mo growth, velocity 5, wait 18 monthsPayoff ≈ 22 hours — almost 4× original. Heatmap goes red past month 12. Cognitive load on the team:
load unmeasured . - 4hr fix, 5%/mo growth, velocity 2, wait 12 monthsPayoff ≈ 7 hours. Stable code plus low velocity keeps debt manageable. Repay opportunistically.
- 10hr fix, 12%/mo growth, velocity 8, wait 24 monthsPayoff ≈ 152 hours. The classic "we'll never fix it" outcome. Eventually rewritten under duress.
When to use which tool
- CYAN · STABLE — Payoff under 2x the initial fix — pay it now, compounding still manageable.
- GOLD · GUARDED — Payoff 2-4x initial — schedule a repayment sprint within the next quarter.
- MAGENTA · CRITICAL — Payoff above 4x initial — red-band territory, every new feature multiplies it.
Related
- Tech Debt InterestQuantify the compounding hours to fix a shortcut as the codebase grows on top of it. Maintenance heatmap.
- When to Run Tech Debt InterestFive engineering moments when the compound cost number actually changes scheduling.
- Five Tech Debt Interest MistakesThe errors that make compounded-cost math look exaggerated or irrelevant.
Frequently asked questions
› Is compounding at 8%/month realistic? Trust & accuracy
For active modules, yes. Each feature assumes the shortcut, increasing entanglement. Stable utility code compounds much slower — use 1-3%/mo.
› What if we rewrite the whole module later?
Rewrite cost is usually 3-5× the compounded payoff at rewrite time. The longer you wait, the more you pay — either via compounded patches or a bigger rewrite.
› Does this apply to non-code debt?
Yes, loosely. Documentation, test coverage, and process debt compound similarly — each new item built on a bad foundation adds cleanup cost.
› How should I use a decision framework in real life? How-to
Use a decision framework to expose the tradeoff, not to outsource the decision. Write down the inputs, compare the output with your constraints, then ask what would change the answer. The strongest use is scenario testing: base case, conservative case, and failure case.
› Is this financial, legal, or tax advice? Trust & accuracy
No, this is not legal, financial, tax, medical, or professional advice unless the page explicitly says that use case is supported. It organizes assumptions so you can inspect them. Verify high-stakes choices with qualified people who can review facts, contracts, regulations, and downside risk.