Calculator: Property v Shares v Offset
Compare investment property, shares/ETFs, and offset account returns side-by-side. This calculator helps you understand the mathematical and behavioural differences between these investment options to make informed decisions about where to put your money.
Why Use This Calculator
Deciding between investment property, shares/ETFs, and offset accounts is one of the most important financial decisions you'll make. This calculator helps you compare these options side-by-side, considering both the mathematical returns and behavioural factors like risk, time commitment, and liquidity.
- Compare final values and total returns across all three options
- Understand the impact of taxes, fees, and costs on your returns
- See how leverage, negative gearing, and franking credits affect outcomes
- Consider behavioural factors like risk, time commitment, and liquidity
Common Settings
Default: $100,000 - This is your total investment capital. For property, this covers deposit + upfront costs (stamp duty, legal fees, inspection, loan fees). For shares/offset, this is the amount invested. Adjust to match your available capital.
Default: 10 years - The time horizon for your investment comparison. Longer periods allow more compounding but increase uncertainty. For offset accounts, if this exceeds your mortgage term, offset savings stop when mortgage is paid off (see warning below).
Default: 32.5% - Includes Medicare levy. Typical brackets: 19% (up to $18,200), 20.5% ($18,201-$45,000), 32.5% ($45,001-$120,000), 37% ($120,001-$180,000), 45% ($180,001+). This affects tax on rental income, dividends, and deductions (ATO, 2024).
Investment Property Settings
Auto-calculated from investment amount, deposit %, and upfront costs. You can manually override this value. If changed, the deposit will adjust while keeping investment amount constant.
Default: 20% - Typically 20% for investment properties to avoid Lenders Mortgage Insurance (LMI). Lower deposits increase leverage but add LMI costs. Higher deposits reduce loan amounts and interest costs (Australian Banking Association, 2024).
Default: 6.5% - Current average investment property interest rate in Australia (RBA, 2024). Higher rates increase loan costs and reduce cash flow. Lower rates improve returns but are less common.
Default: 30 years - Standard loan term for Australian mortgages. Longer terms reduce monthly payments but increase total interest paid. Shorter terms pay off faster but require higher payments.
Default: 4% - Australian capital city rental yields typically range from 3-5% for houses and 4-6% for units. Regional areas often yield 5-8% (CoreLogic, 2024). Applied to current property value each year. Higher yields improve cash flow.
Default: 3% - Long-term Australian property capital growth averages 3-4% annually (RBA, 2024). Growth is applied to the entire property value, not just equity. Higher growth significantly improves returns but is less certain.
Your $100,000 Investment Breakdown
Shares/ETFs Settings
Default: 8% - Historical Australian share market average return (capital growth) is approximately 8-10% annually over the long term (ASX, 2024). This excludes dividends. Higher returns increase portfolio value but are less certain. Past performance doesn't guarantee future results.
Default: 4% - Australian share market average dividend yield is approximately 4-5% annually (ASX, 2024). Applied to portfolio value each year. Dividends are taxed and adjusted for franking credits. Higher yields provide more income but may indicate slower growth.
Default: $0 - Regular additional investments beyond initial amount. Frequency selected below determines how often this amount is contributed. More frequent contributions benefit from earlier market exposure and compounding.
Default: Monthly - More frequent contributions (e.g., weekly/monthly) benefit from earlier market exposure and compounding compared to annual contributions. Dollar-cost averaging reduces timing risk but may increase brokerage fees.
Offset Account Settings
Default: $400,000 - Current outstanding mortgage balance. Offset accounts only save interest on amounts up to the mortgage balance. If offset amount exceeds mortgage, excess earns term deposit interest (lower rate, taxable).
Default: 6.5% - Your current home loan interest rate. Offset accounts save interest at this rate (tax-free equivalent return). This equals the annual return shown in results. Higher rates increase savings (RBA, 2024).
Default: 25 years - Years remaining on your mortgage. If investment period exceeds this, offset savings stop when mortgage is paid off (see warning above). After pay-off, excess funds earn lower term deposit rates.
Investment Property
Shares/ETFs
Offset Account
Side-by-Side Comparison
| Metric | Property | Shares/ETFs | Offset |
|---|---|---|---|
| Initial Investment | $100,000 | $100,000 | $100,000 |
| Final Value | $224,432.03 | $278,726.54 | $165,000.00 |
| Total Return | $-2,570.35 | $245,762.58 | $65,000.00 |
| Annual Return % | 8.42% | 10.79% | 6.50% |
| Risk Level | Medium-High | Medium | Low |
| Time Commitment | High | Low | Low |
| Liquidity | Low | High | High |
Values Over Time
Total Return Comparison
Behavioural Factors to Consider
While the numbers above show the mathematical comparison, there are important behavioural factors that may influence your decision:
Investment Property
- Medium-High Risk: Market fluctuations, tenant risks, liquidity constraints
- High Time Commitment: Managing tenants, maintenance, tax reporting
- Low Liquidity: Weeks/months to sell, high transaction costs
- Leverage Available: Typically 80% LVR
- Tax Benefits: Negative gearing, depreciation deductions
Shares/ETFs
- Medium Risk: Market volatility, but high liquidity
- Low Time Commitment: Passive investment, minimal ongoing management
- High Liquidity: Sell instantly, low brokerage costs
- Leverage Optional: Margin lending available (50-70% LVR typical)
- Tax Benefits: Franking credits, CGT discount after 12 months
Offset Account
- Low Risk: No capital risk, guaranteed savings
- Low Time Commitment: Automatic, no action required
- High Liquidity: Instant access, no penalties typically
- No Leverage: Reduces debt rather than creating it
- Tax Benefits: Interest saved is not taxable income
Disclaimer: This calculator provides estimates based on the inputs provided. Actual investment returns, property values, rental yields, and interest rates may vary significantly. Past performance does not guarantee future results. Property values can go down, shares can lose value, and offset account benefits depend on your mortgage terms. This calculator does not account for all possible costs, tax implications, or market conditions. This is not financial advice. Please consult with a qualified financial advisor, tax accountant, and property specialist before making investment decisions.