How do you use the leveraged property return calculator?
- Enter the property price, your down payment, the yearly price growth you expect, the monthly rent, how long you will hold it and the loan rate.
- Loan tenure, rent growth, upkeep, selling cost, new flat or resale, and the stamp duty and registration rates are under “Adjust rates, loan and costs”.
- Compare the yearly return on your own cash with the loan against paying all cash.
Does a home loan increase your property return?
Only when the property earns more than the loan costs. A loan lets you control a ₹ 1 crore flat with less of your own money, so gains are spread over a smaller amount. But you also pay interest every month. When price growth plus rent beats the loan rate, the loan lifts your return; when it does not, the loan pulls it down, and losses are magnified the same way.
The calculator counts every rupee you put in and take out, month by month: the down payment and buying costs on day one, any month the rent does not cover the EMI and upkeep, and the sale proceeds less the loan still owed. The yearly return that balances these is the IRR, so a longer or shorter holding is compared fairly.
How the return is worked out
Lower of price × (1 − down payment %) and the RBI loan-to-value limitDown payment + stamp duty + cess + surcharge + registrationRent − EMI − upkeep ÷ 12Sale value − selling cost − loan owed; return = IRR of all flowsWorked example: ₹ 1 crore flat, 25% down, 7% growth
The loan is ₹ 75 lakh at 8.5% over 20 years, an EMI of ₹ 65,087. Over 10 years you put in ₹ 71,42,368, including the months the rent of ₹ 30,000 (growing 5% a year) does not cover the EMI and upkeep. After selling at ₹ 1,96,71,514 and clearing the ₹ 52,49,537 still owed, you get back ₹ 1,40,28,547. That is 8.93% a year on your cash, almost the same as 8.89% paying all cash, because the flat earns about the loan rate.
Worked example: when growth is higher or lower
At 9% growth, the loan lifts the return to 12.21% a year against 10.67% with cash. At 5% growth it cuts it to 5.37% against 7.13%.
Return with and without a loan
| Price growth | With loan | All cash |
|---|---|---|
| 3% | 1.37% | 5.40% |
| 5% | 5.37% | 7.13% |
| 7% | 8.93% | 8.89% |
| 9% | 12.21% | 10.67% |
What should you keep in mind?
- Growth and rent are assumptions. A loan magnifies a shortfall as much as a gain.
- You must be able to pay the EMI in months the flat is empty. Keep a buffer.
- Figures are before tax. Interest on a let-out home reduces tax on the rent; check your position with your Chartered Accountant.
- Have a property lawyer check the title and approvals before you buy.
Frequently asked questions
Related answers and guides
- Prepay Your Home Loan or Invest the Surplus?
- Home Loan Down Payment: RBI's LTV Limits Explained
- Is It a Good Time to Buy Property in Bengaluru? 2026 Data
- Commercial vs Residential Property Investment: What Changes
Sources
- Karnataka Stamp Act, 1957 and Revenue Department notification RD/46/MNMU/2025 (registration fee 2% from 31 August 2025). Rates verified 18 Oct 2026.
- RBI loan-to-value limits for individual housing loans. Standard reducing-balance EMI. Growth and rent figures are your inputs, not forecasts.
Indicative only and before tax. Verify the tax position with your Chartered Accountant before acting, and confirm stamp duty and registration on Kaveri Online before registering.
Buying a home in Bengaluru? Talk to an acre&key advisor.