There are many ways to finance your investments. You can allocate a portion of your regular income to invest with, you can participate in an employer sponsored retirement or investment program where they match your investment contributions, or you can borrow money for investing. While this final method of financing your investments gives you more money to develop your investment portfolio with, it also creates an added element of risk. If your investment doesn't pay off, you are then stuck paying off the money that you borrowed to invest, as well as the loan interest and fees.
Financial Calculators from
Investment is worth $572,542 after 25 years.
press spacebar to hide graph
This is the total loan amount you are planning on taking out. This amount is also used as the initial value of the appreciable asset or investment that you are making.
Loan term in years
The number of years you wish to analyze for this loan. This can be any number from one to 30 years.
Loan interest rate
The annual interest rate you are charged for this loan. This calculator assumes that your payments are made monthly and that interest is compounded monthly.
Starting investment value
The starting value of your investment. This may be higher than your loan amount if you either had an immediate gain or invested outside money (not received from the loan). This could be lower than your loan amount if not all of your loan value went directly into your investment. For example, if you had fees associated with the investment, or if you paid more than you could immediately receive on a sale of the investment.
Investment rate of return
This is the annually compounded rate of return you expect from your investments. For the purposes of this calculator, taxation is not factored into the results. If you pay taxes on the interest, dividends or capital gains from these investments you may wish to enter your after-tax rate of return.
The actual rate of return is largely dependent on the types of investments you select. The Standard & Poor's 500® (S&P 500®) for the 10 years ending December 31st 2018, had an annual compounded rate of return of 12.1%, including reinvestment of dividends. From January 1, 1970 to December 31st 2018, the average annual compounded rate of return for the S&P 500®, including reinvestment of dividends, was approximately 10.2% (source: www.standardandpoors.com). Since 1970, the highest 12-month return was 61% (June 1982 through June 1983). The lowest 12-month return was -43% (March 2008 to March 2009). Savings accounts at a financial institution may pay as little as 0.25% or less but carry significantly lower risk of loss of principal balances.
It is important to remember that these scenarios are hypothetical and that future rates of return can't be predicted with certainty and that investments that pay higher rates of return are generally subject to higher risk and volatility. The actual rate of return on investments can vary widely over time, especially for long-term investments. This includes the potential loss of principal on your investment. It is not possible to invest directly in an index and the compounded rate of return noted above does not reflect sales charges and other fees that investment funds and/or investment companies may charge.
This is the percentage of the return generated by your investment that is reinvested. For example, if your investment generates $1,000 per month and you reinvest 50%, the value of your investment will increase by $500.
Why use the Investment Loan Calculator?
The purpose of the Investment Loan Calculator is to illustrate how financing your investments with borrowed money can increase your return potential. To use this financial tool you will need to enter information about your loan terms, as well as information about the investment that you are considering.
The Investment Loan Calculator doesn’t only help to illustrate the potential benefits for a particular investment; it can also help you to determine what loan terms you need to make the transaction profitable. Knowing exactly how much you stand to gain is essential when balancing the risk against the potential rewards associated with investment loans.
How to use the Investment Loan Calculator
Here's how it works:
- Enter the amount you intend to borrow by typing into the box or using the slider next to it
- Input the number of years you will repay your loan over
- Specify your loan’s interest rate
- Enter the value of your initial investment – often this is the same as the loan amount, unless you are splitting your loan across multiple investments or have your own capital to invest alongside the loan
- Add your predicted rate of return on your investment – it is recommended you make a cautious estimate to give yourself extra breathing room
- Enter the percentage of your profits you intend to reinvest on an annual basis
- Click View Report to see information on your loan, investment, and how they interact and affect your net value.
Who is this calculator for?
This calculator is most useful if you:
- Are looking into the possibility of making an investment with borrowed money
- Want to measure your investment’s projected rate of return against your monthly payments
- Would like to calculate the difference in return based on the percentage you reinvest.
How can I predict my annual rate of return?
Firstly, remember that no investment prediction is guaranteed to be correct. The results shown by the Investment Loan Calculator uses rate of return as an average, as in reality this can fluctuate a great deal from year to year. Typically, investments with higher returns come hand in hand with higher risk due to increased volatility.
Despite this, you can look back at the history of the company you are investing in, as well as its competitors. This information, combined with your knowledge of the current economic climate, will enable you to make an educated estimate of what your average rate of return could be over the course of your loan at least. When in doubt, estimate conservatively.
I am also thinking about investing in property; where do I start?
Investing in property is another highly worthy financial avenue that you can take if you feel you are in the position to do so. It is similar to an Investment Loan in that you are borrowing money to have a stake in something real, or tangible.
Click "Get FREE Quote," above, and answer the brief set of questions. We'll then find mortgage loan providers serving your area who can offer you a solution tailored to your exact requirements. The lenders will then contact you directly with their best offers. It couldn’t be simpler!
Other Mortgage and Financial Calculators
In addition to the standard mortgage calculator, this page lets you access more than 100 other financial calculators covering a broad variety of situations. Choose from calculators covering various aspects of mortgages, auto loans, investments, student loans, taxes, retirement planning and more.
- Adjustable Rate Mortgage Calculator
- Interest Only ARM Calculator Overview
- How much can I borrow?
- Mortgage comparison: 15 years vs 30 years
- Balloon Loan Calculator
- ARM vs. Fixed-Rate Mortgage Calculator
- APR Calculator for Adjustable Rate Mortgages
- Bi-weekly Payment Calculator
- Blended Rate Mortgage Calculator
- Fixed Rate Mortgage vs. Interest Only ARM calculator
- Mortgage Tax Savings Calculator
- Rent vs. Buy Calculator
- Mortgage Payoff Calculator
- Mortgage Required Income Calculator
- Interest-Only Mortgage Calculator
- Mortgage Qualifying Calculator
- Mortgage Calculator Simple (PITI) - Mortgage Calculation
- Mortgage APR Calculator
- Bi-Weekly Payment Calculator For an Existing Mortgage
- Enhanced Loan Calculator
- Existing Loan Calculator
- Mortgage Debt Consolidation Calculator
- Mortgage Points Break-Even Calculator
- Refinance Break-Even Calculator
- Refinance Calculator
- Auto Rebate vs. Low Interest Financing
- Bi-weekly Payments for an Auto Loan Calculator
- Dealer Financing vs. Credit Union Financing Calculator
- Auto Lease vs. Auto Buy Calculator
- Home Equity vs. Auto Loan Calculator
- Auto Loan Calculator
- Bi-weekly Payments for an Auto Loan Calculator
- Auto Loan Payoff Calculator
- Retirement Income Calculator
- 401(k) Net Unrealized Appreciation Calculator
- 401(k) Savings Calculator
- 403(b) Savings Calculator
- 457 Savings Calculator
- 72(t) Distribution Impact Calculator
- Beneficiary Required Minimum Distributions
- Pension Plan Retirement Options
- Retirement Contribution Effects Calculator
- Retirement Planner
- Roth vs. Traditional IRA Calculator
- 72(t) Distribution Options Calculator
- Social Security Benefits Calculator