Leverage Simulator
See how financial leverage amplifies both gains and losses across different LTV levels
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Annual Appreciation Rate: 5%
-10%0%15%
Equity Growth Over 5 Years at 5% Annual Appreciation
5-Year Summary at 5% Appreciation
| LTV | Down Payment | Loan Amount | Yr-5 Value | Yr-5 Equity | Equity ROI |
|---|---|---|---|---|---|
| 0% | $400,000 | $0 | $510,513 | $510,513 | 27.6% |
| 50% | $200,000 | $200,000 | $510,513 | $310,513 | 55.3% |
| 75% | $100,000 | $300,000 | $510,513 | $210,513 | 110.5% |
| 80% | $80,000 | $320,000 | $510,513 | $190,513 | 138.1% |
| 90% | $40,000 | $360,000 | $510,513 | $150,513 | 276.3% |
Leverage Matrix: Equity ROI by LTV and Appreciation
5-year equity ROI for each LTV level across different appreciation scenarios
| LTV / Appr. | -5% | 0% | +3% | +5% | +10% |
|---|---|---|---|---|---|
| 0% | -22.6% | 0.0% | 15.9% | 27.6% | 61.1% |
| 50% | -45.2% | 0.0% | 31.9% | 55.3% | 122.1% |
| 75% | -90.5% | 0.0% | 63.7% | 110.5% | 244.2% |
| 80% | -113.1% | 0.0% | 79.6% | 138.1% | 305.3% |
| 90% | -226.2% | 0.0% | 159.3% | 276.3% | 610.5% |
Key Insight: Leverage is a double-edged sword. At 90% LTV, a 5% appreciation produces a ~276.3% equity ROI, but a -5% decline produces ~-226.2% ROI. All-cash (0% LTV) dampens both gains and losses. This simplified model excludes mortgage payments, rental income, and transaction costs.