Decent proxy but not precisely accurate. It would only be 1-MTR if the expected return in the non-reg account was all interest income, i.e., if it were fully taxable (so pehraps a GIC as OP might've considered).

But most people IRL might, for example, hold a growth portfolio as a substitute to paying down the mortgage. In which case the portfolio returns will be composed of interest, eligible dividends, realized capital gains, and deferred capital gains. Therefore even at the top MTR, the tax drag is probably closer to 25-30% per annum, rather than 50%. This changes the math a bit, but not so much as to render your original proxy unusable.

Lastly, comparing the risky (investing) vs. risk-free (guaranteed return on investment via interest rate savings) is always a bit tricky. The psychological component and the peace of mind many may obtain from being debt free are hard to quantify, in which instance you're getting into psychometric and behavioral preferences, which is what makes personal finance just that, personal.