Borrow-to-Invest Calculator

How the result is calculated

1. The loan is repaid with a monthly annuity: the payment is P × r / (1 − (1 + r)^−n), where r is the annual rate divided by 12. The whole loan, less the purchase fee, is invested at once.
2. History mode follows the real month-end prices (dividends reinvested) from the month you choose. The yearly fund fee is taken from the units monthly. The net result is the value of the investment minus all payments on the loan and minus the debt still left.
3. The required annual return is the average yearly return at which the investment ends exactly at the sum of the payments, so that the net result is zero. The worst moment is when the investment was furthest below the debt that remained.
4. Future mode simulates 1 000 random paths with the mean return and volatility you enter and shows the range of net results and the share of paths that end in a loss.

Assumptions and limits

• Borrowing to invest magnifies losses: the payments continue even when the investment has fallen, and you can lose more than you can afford.
• Taxes, the lender's fees and insurance are not included, and the interest rate is assumed to be fixed for the whole term.
• A historical period is one path out of many. It does not show what the next period will do.
• The starting rate is an average of new consumer loans from the central bank (or the US Federal Reserve), not an offer. Your own rate may be much higher or lower.

The starting loan amount is a round example, not a statistic. For some countries the starting rate is a figure we know only from the press; the table below marks each one.

Data sources and the period they hold for

Every number a calculator starts with or computes from comes from one of the sources below. Series names are given as the publisher names them. Each row shows the period the data refer to and, where we record it, the day we downloaded them. Official data can be months old when they are published, so check the current figure before you decide.

Official

Published by a central bank, a statistical office, the European Union or another public body.

Research or industry data

A dataset of a university, an index provider, an industry association or a data vendor.

Reported

A figure of an official body that we know only from the press and did not check in the primary source. Treat it as approximate.

Example

A round number of ours, not a statistic. Replace it with your own.