Finance

Home Return on Investment Calculator (20 Years)

Calculate return on investment as a percentage. This home version uses a 20-year planning term as its starting point.

For this 20-year home investment, the Return percentage is the total gain or loss on the amount invested, expressed as a share of that amount, so a positive Return means the final value is higher than the amount invested, while a negative Return means it is lower.

Formula

Return equals final value minus invested amount, divided by invested amount, times 100.

How it works

A positive return means the final value is higher than the amount invested.

Worked example

Amount invested $10,000, final value $15,000, term 20 years. Using the page formula, return equals $15,000 minus $10,000, divided by $10,000, times 100, which is $5,000 divided by $10,000, times 100, which is 50.00%. That is the calculator's own result for these defaults, and it is the same on every page in this group because the term is not an input.

Spread over 20 years as an illustration only, not as an output of this page, the simple average is 50 divided by 20, which is 2.50% a year, and the steady rate that would compound $10,000 to $15,000 over 20 years is 2.05% a year. The steady rate is lower because compounding builds on earlier gains, while the simple average ignores that effect. Neither illustration is the page output, and neither includes fees, taxes, mortgage interest or inflation.

Who this term suits for a home household: a home household looking across a generation of ownership, for example a family home held for 20 years, where a 50% total gain spread over two decades is modest once inflation, maintenance and mortgage interest are counted.

FAQs

What is a good ROI?
There is no single good figure. Compare returns over the same period and with the same risk before deciding.

Is this home calculator exact?
No, it is an estimate for planning only, based on the numbers you enter.

Are these figures financial advice?
No, they are estimates for planning only, not financial advice. Check with a qualified adviser for decisions involving large sums.

Is 50% over 20 years a good home return?
It is modest. The simple average is 2.50% a year and the steady compounded rate is 2.05% a year, before inflation, maintenance and mortgage interest.

What if home prices fall in year 20?
Then the final value falls and so does the return. A 20-year figure hides every rise and fall along the way, so it is not a promise for the future.

Should other home costs be counted before a 20-year commitment?
Yes. Add major repairs, extensions, insurance and interest to the invested amount for a fairer picture of what the home really returned.

Estimates only, not financial advice. Figures are approximate and do not include all fees, taxes, or changing rates unless stated.