A what-if, not a forecast
Property growth calculator.
Set your own growth, rent and loan assumptions and see what they would mean for value, loan balance and equity over the years you choose. The tool opens on an editable example, so change anything that does not fit the property.
Value at the end
$1,591,979
The purchase price grown at your rates for the years you chose.
Loan balance
$262,422
What would be owing, given your repayment type.
Usable equity
$1,011,161
The part of your equity a lender may let you borrow against, up to a 80% LVR cap, before it checks your income.
Equity
$1,329,556
The value less the loan balance.
Rent a year
$47,345
Yearly rent before any costs; the card shows the final year.
On these assumptions the model puts the value at about $1,591,979 after 20 years, with about $1,329,556 of equity between the value and the loan.
Year by year
| Year | Value | Loan balance | Usable equity | Rent a year |
|---|---|---|---|---|
| 1 | $630,000 | $474,322 | $29,678 | $27,000 |
| 5 | $765,769 | $447,751 | $164,864 | $30,389 |
| 10 | $977,337 | $403,816 | $378,053 | $35,229 |
| 15 | $1,247,357 | $343,963 | $653,923 | $40,840 |
| 20 | $1,591,979 | $262,422 | $1,011,161 | $47,345 |
These figures carry your assumptions forward. They are not a forecast, and property values can fall. Past performance is not a guarantee of future results. Individual results vary.
How it is worked out
- Sets the loan at your LVR times the purchase price, and the first year's rent at your gross yield times the purchase price. Yield is struck on the purchase price.
- Grows the value by your first-year rate, then your second-year rate, then your long-term rate for every year after.
- Runs the loan month by month. Interest only keeps the balance flat; principal and interest pays it down over a 30-year term.
- Grows the rent by your rent growth rate each year.
- At each year end, works out equity, the value less the loan, and usable equity, the value times a 80% lender cap, less the loan. Usable equity is the part of your equity a lender may let you borrow against, before it checks your income.
- Charts every year and lists milestone years in the table, with the final year in the cards.
What this tool leaves out
- Ups and downs. Real values move unevenly and can fall; this model grows smoothly at the rates you set.
- The costs of holding the property: rates, insurance, management, maintenance, vacancy and land tax. The cash flow calculator covers those.
- Tax, including the tax effect of rent and interest, stamp duty and capital gains tax on a sale.
- Whether you can afford the repayments, or what a lender would approve. Usable equity here is a ceiling, not a pre-approval.
- Changes to the interest rate. The rate you enter is held for every year.
- Inflation and valuation. Results are in future dollars, and the value is a calculation on your assumptions, not a valuation.
Questions investors ask
Is this a forecast?
No. It shows what your assumptions would produce, nothing more, and nobody can tell you what a property will be worth in future. Past performance is not a guarantee of future results. Individual results vary.
Why set growth separately for the first two years?
Your view of the next year or two may differ from your long-run view. Splitting them lets you test, for example, a flat start followed by steadier growth. Set all three the same for one constant rate.
What growth rate should I use?
That is your call, and it is worth testing more than one. Run a cautious case, a middle case and a stronger case, and see how far apart the results land. A wide gap shows how much of the answer rests on the assumption.
What is usable equity?
Equity is the property's value less the loan. Usable equity is the part of your equity a lender may let you borrow against, up to its LVR cap, before it checks your income. The tool uses a 80% cap, and each lender sets its own.
Why is rent shown before costs?
The yield you enter is gross: the first year's rent as a share of the purchase price, before any costs. The rental yield and cash flow calculators take the costs into account.
Does this include tax?
No. The tax on rent, the deduction for interest and any capital gains tax on a sale are all left out, so every result is before tax.
Where to next
If you want your growth assumptions tested against sales evidence for a real property, we can do that with you.
This calculator gives general information only. Every result follows from the assumptions you enter; it is not a forecast of growth, rent or interest rates, it is not a valuation, and usable equity is shown before any assessment of your income or a lender's own valuation and policy. It is not financial, credit or tax advice, and apart from the figures you enter, it does not take into account your objectives, financial situation or needs. Past performance is not a guarantee of future results. Individual results vary. CHAD Property coordinates with brokers, accountants and planners and does not give credit or financial advice, so speak with a mortgage broker or your financial planner before you act.
The tools on this page give general information only. Each result is an estimate, worked out from the figures you enter and the assumptions shown, using rates and rules as at the date shown. It is not a quote, and it is not intended to be relied on to make a decision about a financial product, a loan or your tax. It is not personal financial, tax, credit or legal advice, and apart from the figures you enter, it does not take into account your objectives, financial situation or needs. Rates, thresholds and laws change, and some details of recent changes are not yet final. CHAD Property is a buyer's agency. It does not hold an Australian financial services licence or an Australian credit licence, and it is not a registered tax agent. We do not advise on tax, lending, financial products or how to structure ownership, including through a self-managed super fund, a company or a trust; we work alongside the brokers, accountants and financial planners who do. Before you make a financial decision, consider getting advice from a licensed financial adviser, and check any figure here with a licensed or registered professional who knows your situation.