Purchase budget
The separate purchase-cost calculator adds the contribution to the price, entered duty and fees, and a retained cash reserve, then subtracts a confirmed grant available by settlement. The base loan is price less contribution, excluding financed fees. It does not calculate duty or assess eligibility. Blank purchase costs remain unconfirmed. Its local draft and exports are separate from property sessions.
Annual income and yield
Weekly rent is multiplied by 52, fortnightly by 26, monthly by 12 and annual by 1. Vacancy reduces contracted annual rent by the entered weeks divided by 52. Management fees apply to collected rent. Other recurring expenses are annualised using their selected frequency.
- Gross yield = contracted annual rent ÷ purchase price × 100.
- Net yield = (collected rent − operating costs) ÷ purchase price × 100.
- Net yield on total cost = net operating income ÷ (price + purchase costs) × 100.
- Pre-tax cash flow = net operating income − full debt repayments − annual capital spending.
Finance and initial cash
Initial cash equals price plus entered purchase costs minus mortgage debt plus any offset balance. P&I repayments are calculated monthly with a monthly rate equal to the annual nominal loan rate divided by 12. Interest uses the loan balance less the fixed offset balance, floored at zero; the scheduled P&I payment remains unchanged. The model assumes all debt interest is for the rental investment.
Interest-only payments use the same monthly interest calculation. At interest-only expiry, payments switch to P&I over the remaining term. If the entire term is interest-only, the outstanding principal is payable at maturity. No redraw, fees, daily-interest differences, varying rates or extra repayments are modelled.
Growth and investment comparisons
Rent and fixed costs begin growing in year two. Property value grows from purchase to the end of year one. Selling fees are a percentage of end-of-year value plus entered fixed sale costs. No immediate value uplift from improvements is assumed.
Alternative investments begin with the same cash as the property. Each receives an end-of-year contribution equal to that year’s property cash shortfall. Property cash surpluses accumulate separately at the bank savings rate. The property endpoint is value less outstanding debt and selling costs, plus offset cash and accumulated surpluses. This matches external cash budgets; it does not match investment risks.
ASX input is an AUD annual total-return scenario. S&P 500 input is USD; its AUD scenario equals (1 + USD return) × (1 + entered annual FX effect) − 1. Fund fees reduce each year’s closing balance before new contributions. Dividends are already included. The historical references are S&P/ASX 200 9.31% AUD and S&P 500 14.82% USD annualised total returns over the ten years to 31 December 2025, from S&P Australia and S&P US. They are not predictions.
All alternative comparisons exclude personal tax, CGT, franking credits, withholding tax and investment entry/exit fees. Inflation-adjusted values divide each nominal year-end amount by (1 + inflation)^year. Interest and market returns are assumed constant, so the chart does not represent volatility or sequence-of-returns risk.
Refinancing
Refinancing compares monthly loan schedules at constant rates with a fixed offset. Switching costs are paid upfront or added to the new balance. Annual fees are divided by 12 and stop when each loan is repaid. Interest-only periods switch to P&I over the remaining term; a full-term IO balance is repaid at maturity.
Net savings at a chosen month = current cumulative repayments and fees − new cumulative repayments and fees − upfront costs + current remaining debt − new remaining debt. This is also interest and fee savings less all switching costs. Financed switching costs are counted once. Repayment reduction is shown separately. Cost recovery is the first month net savings become non-negative; the tool flags if this reverses later.
Full-term savings compare each loan through repayment. Refinance calculations exclude tax, cash-out borrowing, future rate changes and investment returns on repayment differences. See refinancing an investment property.
Tax scenario
The optional tax adjustment uses collected rent less assumed deductible operating expenses, loan interest and entered annual deductions. Principal and capital spending are excluded from deductions. An estimated loss benefit is applied only if the user explicitly enables it. Otherwise a negative taxable result gives no current-year benefit in this model. This does not assess eligibility, ownership shares, loss carry-forwards, changing legislation or timing of refunds. Tax assumptions do not feed into the alternatives comparison. See the cash flow and tax guide.
Insights and precision
Break-even rent solves for the weekly rent covering entered operating costs, mortgage payments and capital spending at the entered vacancy and management fee. The target purchase price divides current net operating income by the selected target net yield; it does not preserve a deposit percentage or recalculate finance. Equity IRR uses initial cash outflow, annual property cash flows and final net sale proceeds. IRR is omitted where a unique conventional cash-flow solution is unavailable.
Calculations retain full numeric precision internally and round only for display. Blank inputs remain identified as unconfirmed even where arithmetic uses zero. These are planning scenarios, not valuations, return guarantees or recommendations.