ETF or property

What could the same equity and monthly budget become?

A useful comparison has to count more than the future property price. This one separates debt, acquisition and sale costs, maintenance, an optional rent benefit, ETF tax and any cash-budget shortfall.

Two people, the same money

A buys a property, B invests in an ETF. Both start with the same equity; the mode below decides what each puts in every month. Monthly amounts rise with inflation, and results are in the euros of each year, not adjusted for inflation.

For both

Starting equity€ Comparison horizonyears Returns and pricesHistory replays German house prices and inflation year by year, and the ETF from a backtest or at your fixed return. House pricesA city replays what flats there sold for; inflation is Germany's either way. Start yearThe house prices above set the earliest start: Germany 1971, each city later. Left blank, the replay starts as late as the horizon allows and ends in the last year the chosen prices cover: 2025 for Germany, earlier for some cities.

Monthly money and inflation

How the money flows each monthB invests what the property costs A beyond its rent; a surplus A invests. For a home A lives in, this is buying against renting.B invests the whole budget; A pays the property from it and invests the rest. A gap means no winner. Monthly budget after housing costs€What is left to invest once you have paid rent. The owner spends the same total: rent avoided goes to the mortgage instead. Inflation%

A Property

Property purchase price€ Property useThe cash flow and tax treatment differ materially; choose the actual use rather than blending them. Yearly rent, as % of the price%The cold rent for a year, without heating and service charges, as a share of the purchase price. Choose the property use above for what exactly to enter.What a comparable home would cost to rent for a year, without heating and service charges, as a share of the purchase price. Example: 1,000 € a month for a 400,000 € home is 12,000 € a year, or 3 %. On the ETF path B pays this rent; A saves it.The cold rent your tenant pays in a year, as a share of the purchase price (the gross rental yield). Example: 1,000 € a month on 400,000 € is 12,000 € a year, or 3 %. Vacancy, management, repairs and tax are set below. Mortgage rate in the replayThe rate German banks charged on average for a mortgage fixed for as long as yours: from 2003 for up to one year, over one to five, over five to ten, or over ten; before 2003 the ten-year rate, whatever the fixed period. Choose your own rate to enter the one from your offer instead. Which rate applies after the fixed-rate period you choose under Financing and costs. Mortgage interest%The yearly borrowing rate (Sollzins) in the bank offer, for example 3.5 %. You do not enter the loan: it is the purchase price minus the starting equity left after purchase costs. The rate holds for the fixed-rate period; the refinancing rate applies after it. Initial repayment (Tilgung)%€1,558 a month; paid off after 29 years at this rate. With the refinancing rate after the fixed period and the same monthly payment: 33 years and 8 months.

Financing and costs

Extra payment each yearA pays an extra amount at the end of every year, off the mortgage or into the ETF. B invests the same amount in its ETF either way, so both still pay in the same. Once the loan is paid off, neither pays it any more. Extra payment a year, as % of the loan%€17,000 a year, the same sum every year.A share of the loan you start with, as loan contracts state it. Banks usually allow 5 to 10 % a year without a charge. Purchase transaction costs% Mortgage fixed-rate periodyears Rate after each fixed-rate period Refinancing rate after the fixed period%Required for a winner when debt remains after the fixed-rate period. The page starts from a stress test above today's rate; it is a scenario, not a forecast.From ; the Bundesbank average then: – Annual maintenance%A share of the purchase price each year, rising with consumer prices rather than with what the flat would sell for, as repair costs do. Often 1 to 1.5 %; less for a new build. Annual property appreciation% Sale costs at the horizon%

Rental-property tax and operating assumptions

Vacancy and rent loss% Monthly management not passed on€ Monthly deductible maintenance spent€Repairs on top of the yearly maintenance above. Both are deductible as you pay them. Is the yearly maintenance a WEG reserve?Repairs to a let property are deductible when paid. A transfer to a WEG reserve only once the WEG spends it, taken here as a year later. Marginal income-tax rate% Building share of acquisition cost% Building depreciation rate% Sale gain tax rate%Optional; the marginal rate is used when this is blank.

These fields affect only rental-property mode. A negative modeled tax is a potential loss offset, not a guaranteed refund. The house is let for the whole horizon, so a sale within ten years is taxed under § 23 EStG: the exemption for living in it yourself would need years without rent, which this page does not model.

B ETF

ETF returnsA backtest replays that market month by month in euro, after the fund costs you set. ETF return before fund costs%

A loan for B as well

B borrows as wellB takes a loan of its own, as A does, invests it at once and repays it from the monthly money; when that is not enough, fund units are sold. The interest cannot be deducted from investment income. Loan amount€Leave blank for the same amount as A's mortgage. Loan interest%The yearly borrowing rate. A loan without a property behind it, such as a consumer loan, usually costs clearly more than a mortgage, and banks rarely lend this much without security. Initial repayment (Tilgung)%Paid off after 21 years and 7 months.

Fund costs and tax

Annual fund costs% Base tax rate on investment income% Fund partial exemption%The allowance is applied after the exempt share, then the base tax rate is charged. Tax-free allowance each year€

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What is kept equal

Starting equity, the money paid in, and time

A uses the equity for purchase costs and a down payment; B invests it. Each month both pay in the same: what the property costs A beyond its rent, or one shared budget, whichever mode you choose.

What remains user-defined

Housing benefit and local transaction costs

Rent avoided can be economically important, but it is not universal. Enter the benefit that belongs to your situation and the purchase-cost percentage for your location.

Important limitations

What still remains outside the model

Property: location, major renovation, financing fees, liquidity and the time needed to sell. Owner-occupied mode assumes no sale-gain tax; rental mode keeps the house let throughout, so a sale within ten years is taxed under § 23 EStG, and depreciation stops once the building is written off; not every loss rule is modeled. ETF: an accumulating fund, taxed when sold and through the Vorabpauschale each January; distributions are not modeled.