Leverage Power Calculator
See how borrowing amplifies your investment returns — and your risks.
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Leverage Results
Leveraged ROE
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return on your own capital
Total Capital
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Investment Gain
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Total Loan Cost
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Net Profit
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Without Leverage Profit
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Unleveraged ROE
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Break-even return rate: — — minimum investment return needed to cover the loan cost.
Year-by-Year Breakdown
| Year | Investment Value | Loan Outstanding | Net Worth | ROE % |
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Frequently Asked Questions
- What is leverage in investing?
- Leverage means using borrowed money alongside your own capital to make a larger investment. This amplifies both gains and losses. If assets earn more than the loan cost, leverage boosts your return on equity significantly.
- What are the risks of using leverage?
- If your investment return falls below the loan interest rate, you lose money on the borrowed portion and still owe interest. In extreme cases you can lose more than your initial capital. Leverage is suitable only for experienced investors with clear risk tolerance.
- What is a good leverage ratio for Indian investors?
- For real estate, borrowing 70-80% of property value is common. For business, a debt-to-equity ratio of 1:1 or lower is generally healthy. For equity markets, most advisors recommend avoiding leverage unless you have significant experience.
- Real estate vs equity — which benefits more from leverage?
- Real estate traditionally benefits more from leverage in India because rental income covers part of the loan cost and property appreciates steadily. Leveraged equity investing is riskier due to higher volatility and margin call risk.