Opens in a new tab

Compound Interest Calculator

Strategic Lending · Smarter Debt · Lasting Wealth
Back to Calculators
Book a Call

The same dollar, three homes

Compounding rewards two things: time, and how much of your lever you put to work. This tool takes the same money and follows it down three paths over the years you hold it. A savings account, where the interest is taxed every year. Your own home, where the whole property grows and the gain is free of capital gains tax when you sell. Or an investment property, where growth is untaxed while you hold, with capital gains tax due only at sale. Same money in, same growth rate, so you can see what time, tax, and borrowing do to what you actually keep.

Set your numbers
Move the sliders. Every path uses the same money in and the same growth rate, so the comparison stays fair.
To demonstrate the power of compounding, this tool leaves out any associated home loan repayments, or any rent where there is no home ownership. Our aim is to equate the cash invested, be it into a bank or property, or any other asset class such as ETFs, and then highlight the impact of leverage. Stripping home payments from the exercise reduces the complexity given the many variables. To model your own position accurately, contact Charter Finance.
$1,500,000 The home or investment property you would buy.
$375,000 In the bank, this is what you set aside. For property, this is your deposit plus an estimate for stamp duty and purchase costs. It tracks the property price, and holds at a minimum of 25% (a 20% deposit plus about 5% costs).
5% p.a. Applied equally to savings and property.
$0 / month On the savings path this compounds to your balance. With property, it adds to your equity, but ordinarily would be used to repay debt instead.
The savings path is taxed at this rate every year. Default is the top rate.
Age 30 When you put the money in.
Age 60 How long you hold before you sell or stop.
Set your selling age at least one year later than your buying age to see the projection.
What you keep, three ways
All figures are shown at the age you sell or stop.
Savings

Money in the bank

Your money in, growing at the rate you set, with interest taxed every year.
$0
Your balance after tax
Your money in$0
Growth kept after tax$0
Growth lost to tax$0
Return on your money in0%
Interest is taxed each year at your marginal rate, so the balance grows more slowly than the headline rate suggests. Taxed every year
Your home

Owner-occupied home

Your money in unlocks the whole property. The full value grows. No tax on the gain when you sell.
$0
Your equity, free of capital gains tax
Your money in$0
Property value at sale$0
Loan against the property$0
Extra you added$0
Return on your money in0%
Your own home is free of capital gains tax on sale. The loan against the property is not modelled with repayments. Any extra you add goes straight to your equity. Living costs are not modelled. No tax on the gain
Investment

Investment property

Same borrowing, same growth. No tax as you hold. Capital gains tax at sale, worked out the indexation way.
$0
Your equity after capital gains tax
Your money in$0
Property value at sale$0
Loan against the property$0
Extra you added$0
Capital gains tax at sale$0
Return on your money in0%
Capital gains tax here uses the indexation method: 3% inflation lifts the purchase cost before the gain is taxed. Indicative only. Indexation method

Your money over the years you hold

Three paths, same money in, same growth rate.

Why the property paths pull ahead

The money you have to invest unlocks the whole property, so the growth runs on the full price, not just your deposit. You put in $375,000, but you control a $1,500,000 asset. That borrowing is the bigger driver of the gap between the paths. Tax is the second driver. This tool shows both. It assumes you would pay to live somewhere either way, so it does not model rent against mortgage repayments.

Time is the quiet ingredient

Someone who buys at 30 and holds to 60 gives compounding 30 years to work. Buy the same property later and the same growth rate has fewer years to build on. Move the buying-age slider to see how much those extra years are worth. The point is not the asset. It is the time, or the years, and leverage.

Understand your LEVER

Your LEVER is the spare cashflow you can put to work each year, whether that is paying down debt or building an asset. This tool shows what disciplined saving can become. What it cannot and does not do is tell you what is right for your situation, your income or your borrowing capacity.

Talk to Charter Finance about your LEVER

Key assumptions for this calculator

  • Your money in is an estimate covering the deposit plus stamp duty and purchase costs. The real figure varies by state and by property, and by whether you qualify for any concession. The default of $375,000 on a $1,500,000 property is an estimate, not a quote.
  • This tool does not assess your ability to borrow. It does not look at your income, your existing debts, or lender serviceability rules, nor provide any advice, tax or otherwise. Being able to borrow / buy at this level is a separate conversation to be had with Charter Finance.
  • Your own home is free of capital gains tax on sale. An investment property is not. The investment path applies capital gains tax at sale using the indexation method. Inflation is estimated at 3% per year, which is indicative only.
  • Growth and inflation are assumptions you set or that are fixed here, not predictions. Real returns will vary, and past growth does not guarantee future growth.
  • The savings path is taxed each year at the marginal rate you choose. Tax rates detailed are current against the ATO for the 2026-2027 financial year.
  • Living costs are not modelled in any of the three paths. Whether you rent or pay a home loan, that cost sits outside this tool. The base loan on the property paths is treated as interest-only and held flat, so the tool does not model scheduled mortgage repayments or the interest cost of carrying the loan. Any extra money you add each month is applied straight to reducing the loan, which lifts your equity.