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The same down payment: a home, a REIT, or shares. How far apart are they after five years?

This page is not investment advice.

The question asks how far apart a home, a REIT, and shares are after five years, starting from the same down payment.

This page has no REIT return and no share return. Those two fields stay blank. Until they are filled, it does not calculate an ending amount or a gap. That figure is not on this page yet.

The home uses only the cash, price, loan, monthly rent, interest rate, and holding years you type, plus a sale price you type yourself. The rate and the sale price start blank. A blank field means that figure is not on this page yet.

The mortgage payment is split into principal and interest. Principal reduces cash this month and also reduces the loan, so it is not all an investment cost.

You type the holding years. Five years is the horizon in the question. The calculator uses the years you enter. It does not turn five into a result.

Compare the numbers you type

The five fields are cash, price, loan, monthly rent, and holding years. The interest rate, sale price, REIT return, and share return start blank. A blank field means that figure is not on this page yet.

Cash down payment (HKD)Price (HKD)Loan (HKD)Monthly rent (HKD)Holding yearsAnnual interest rate (percent, yours)Sale price (HKD, yours, not a forecast)REIT annual return (percent, blank)Share annual return (percent, blank)

Monthly cash flowThat figure is not on this page yet.

Monthly cash flow = monthly rent − the level payment. The level payment = interest + principal.

First-month interestThat figure is not on this page yet.

First-month principalThat figure is not on this page yet.

Principal reduces cash this month and also reduces the loan, so it is not all an investment cost.

In this calculation, interest is the cost of using the loan. Principal is repayment.

Last-month interestThat figure is not on this page yet.

Last-month principalThat figure is not on this page yet.

Last-month cash flowThat figure is not on this page yet.

Interest over the whole termThat figure is not on this page yet.

Principal over the whole termThat figure is not on this page yet.

Loan left at the endThat figure is not on this page yet.

Asset left after a saleThat figure is not on this page yet.

Asset left = the sale price you typed − the loan left at the end. The sale price is not a forecast. That asset uses the loan. The REIT and the shares use only the cash.

The loan is repaid over the holding years you typed. This page does not add another term.

Amounts shown are rounded to the nearest Hong Kong dollar.

REIT: the cash grown to the endThat figure is not on this page yet.

Shares: the cash grown to the endThat figure is not on this page yet.

Ending amount = cash × (1 + the annual return you typed), raised to the holding years. Compounded once a year. This page has no other return.

Gaps between the three ending figures

Asset left − REIT ending amountThat figure is not on this page yet.

Asset left − share ending amountThat figure is not on this page yet.

REIT ending amount − share ending amountThat figure is not on this page yet.

These gaps subtract the figures above. The home uses the loan. The REIT and the shares use only the cash. This is not a return after tax or commission.