Outright vs Mortgaged Ownership Comparator
Same property, two financing structures. Compare IRR, year-1 cashflow, and exit proceeds — to see whether leverage is helping you or just amplifying your bet.
Leverage amplifies returns when capital growth is positive and the property pays its mortgage. It also amplifies losses if either fails. Compare IRR but also year-1 cashflow — a strong IRR that depends on the exit is a different bet than one that pays you every year.
Buying with a 65% mortgage delivers 3.5% more IRR than 0%. You tie up €175,000 instead of €500,000 — the freed equity can buy more property.
Red flag · Mortgage rate locked at 4.2%. If rates step up before refinance, the leverage case erodes fast.
Next move · Stress the capital-growth assumption to 0%. If 65% LTV still wins on income alone, the leverage case is robust.
Free saves the scenario. Trial unlocks the full report.
Free stress test
IRR at 65% LTV under stress
Three what-ifs. Individual unlocks the full sensitivity grid.
| What if | Base | Under stress |
|---|---|---|
| Capital growth −2%/yr | 10.8% | 7.6% |
| Mortgage rate +200bps | 10.8% | 8.7% |
| Rent growth −1%/yr | 10.8% | 10.5% |
Leverage amplifies both wins and losses — the same property at a different LTV reacts very differently to these shocks. Individual models the full grid.
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How to interpret your results
- Scenario A defaults to outright (0% LTV). Scenario B defaults to 65% LTV. Move either to model the structure you're considering.
- Higher LTV usually produces higher IRR — but only if capital growth is positive and the property covers its mortgage. If either fails, leverage works against you.
- Compare year-1 cashflow as well as IRR. An IRR built on exit gain is more fragile than one paid in annual rent.
- Same operating costs and rent growth apply to both scenarios — the difference is purely the financing.
What this doesn’t include
Stamp duty, transaction fees, mortgage arrangement fees, and any prepayment penalties on early repayment. These vary too much to model generically. For tax-aware after-tax IRR by jurisdiction, see AssetCentral's portfolio workspace.
Keep going on this property, or move it into the full portfolio so you can track it month after month.
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