A Property Investment Calculator that is free and (hopefully!) easy to use. Have a play and see the difference leverage makes. Please note the assumptions though!
This calculator is designed to determine the following variables when considering a property for investment purposes:
- Gross Yield: Defined as gross annual rent divided by the purchase price.
- Mortgage Lending Amount: The maximum mortgage you could likely secure against the property.
- Deposit Required: The amount of capital you will need to put into the property as a deposit.
- Return on Investment: The return you will get on the deposit invested, defined as the net rent (after mortgage costs) divided by the deposit amount.
It makes the following assumptions:
- It does not take into account buying costs such as Stamp Duty Land Tax, legal fees, arrangement fees, broker fees and so on.
- For the Mortgage Lending Amount, it assumes the maximum you can borrow is 75% of the purchase price. It applies a Rental Stress Test of 125% coverage at a nominal rate of 5.5%. Note: This will vary by lender and product.
- For the Return on Investment Calculation, it does not take into account other running costs such as maintenance, management and voids when calculating the net rent.
- Also for the Return on Investment Calculation, it assumes an interest-only mortgage interest rate of 3.5%
Please note: This is for illustration only and to demonstrate the power of leverage in property investment. Your actual calculations you rely upon for decision making purposes should be much more detailed!
Is there something else you would like to see added? If so, please shoot me a quick message or leave a reply below.