Six ways to finance the same property
Current property · $700,000 · 10-year projection
Financial Tools
Step 3 · Scenarios
Same property, six ways to buy it
Uses your property, rents and expenses from Inputs. Owner-occupied rates start at your base rate (7%) plus each program's adjustment.
Side-by-side comparison
| Metric | 3% owner-occ. | 3.5% FHA | 5% owner-occ. | 10% owner-occ. | 20% investor | 25% investor |
|---|---|---|---|---|---|---|
| Eligibility | 2 gap(s) | 2 gap(s) | 1 gap(s) | 1 gap(s) | 1 gap(s) | 1 gap(s) |
| Program | Conventional | FHA | Conventional | Conventional | Investor | Investor |
| Interest rate | 7.000% | 6.750% | 7.000% | 7.000% | 7.750% | 7.750% |
| Down payment | $21,000 | $24,500 | $35,000 | $70,000 | $140,000 | $175,000 |
| Closing costs | $21,000 | $24,500 | $21,000 | $21,000 | $21,000 | $21,000 |
| Upfront MI (financed) | $0 | $11,821 | $0 | $0 | $0 | $0 |
| Cash to close | $42,000 | $49,000 | $56,000 | $91,000 | $161,000 | $196,000 |
| Loan amount | $679,000 | $687,321 | $665,000 | $630,000 | $560,000 | $525,000 |
| Principal & interest /mo | $4,517 | $4,458 | $4,424 | $4,191 | $4,012 | $3,761 |
| Mortgage insurance /mo | $509 | $315 | $499 | $315 | $0 | $0 |
| PITI /mo | $6,403 | $6,150 | $6,300 | $5,883 | $5,389 | $5,138 |
| Total interest (life of loan) | $947,265 | $917,542 | $927,734 | $878,906 | $884,287 | $829,019 |
| Monthly cash flow | -$1,511 | -$1,257 | -$1,407 | -$991 | $454 | $705 |
| Net housing cost /mo (owner) | $1,511 | $1,257 | $1,407 | $991 | — | — |
| Cash-on-cash | -43.17% | -30.79% | -30.15% | -13.06% | 3.38% | 4.31% |
| DSCR | 0.89x | 0.94x | 0.91x | 0.99x | 1.11x | 1.19x |
| IRR (10 yr) | 11.47% | 12.56% | 11.15% | 11.53% | 15.35% | 14.41% |
| Back-end DTI | 16.9% | 14.8% | 16.0% | 12.6% | 4.2% | 4.2% |
Ratios used in this comparison
Open any term for its meaning, calculation, and how to read the result.
PITI
The core monthly housing payment: principal, interest, property taxes, and insurance.
Calculation: Principal + interest + taxes + insurance.
How to read it: Mortgage insurance, HOA, maintenance, and utilities may be additional.
Cash-on-cash return
The year-one cash profit earned by the actual cash you invest.
Calculation: Annual cash flow ÷ cash invested.
How to read it: A negative result means the deal consumes cash after debt service.
Debt-service coverage ratio (DSCR)
How many times property income covers annual loan payments.
Calculation: NOI ÷ annual debt service.
How to read it: 1.00 means exact coverage; many lenders look for about 1.20–1.25 or more.
Internal rate of return (IRR)
The annualized return over the full hold, including cash flow, loan paydown, and sale proceeds.
Calculation: Rate that makes all dated cash flows equal today.
How to read it: It is very sensitive to appreciation and the assumed sale price.
Back-end debt-to-income (DTI)
All monthly debts, including housing and allowed rent credit, compared with gross income.
Calculation: Net monthly debts ÷ gross monthly income.
How to read it: Lenders use this broader ratio for qualification limits.
Loan program screening
Each scenario is checked against its program's rules. Edit the rules below to match your lender — limits shown are 2025 national baselines; high-cost counties are higher.
- Credit score: 700 vs. minimum 620
- Down payment: 3% vs. minimum 5% (3% conventional is 1-unit only)→ Increase down payment to at least 5% (35,000 dollars) or switch program.
- Debt-to-income: 16.9% vs. max 50%
- Cash to close + reserves: Have $40,000, need $80,420 (6 mo. PITI reserves)→ Save another $40,420, negotiate seller credits, or use gift funds where allowed.
- Loan limit: Loan $679,000 vs. 4-unit limit $1,551,250
- Credit score: 700 vs. minimum 580
- Down payment: 3.5% vs. minimum 3.5%
- Debt-to-income: 14.8% vs. max 56.9%
- Cash to close + reserves: Have $40,000, need $67,449 (3 mo. PITI reserves)→ Save another $27,449, negotiate seller credits, or use gift funds where allowed.
- Loan limit: Loan $675,500 vs. 4-unit limit $1,008,300
- FHA self-sufficiency: 75% of rents ÷ PITI = 0.91 (need ≥ 1.00)→ Need $700/mo more total rent, or a lower price/payment.
- Credit score: 700 vs. minimum 620
- Down payment: 5% vs. minimum 5% (3% conventional is 1-unit only)
- Debt-to-income: 16.0% vs. max 50%
- Cash to close + reserves: Have $40,000, need $93,798 (6 mo. PITI reserves)→ Save another $53,798, negotiate seller credits, or use gift funds where allowed.
- Loan limit: Loan $665,000 vs. 4-unit limit $1,551,250
- Credit score: 700 vs. minimum 620
- Down payment: 10% vs. minimum 5% (3% conventional is 1-unit only)
- Debt-to-income: 12.6% vs. max 50%
- Cash to close + reserves: Have $40,000, need $126,298 (6 mo. PITI reserves)→ Save another $86,298, negotiate seller credits, or use gift funds where allowed.
- Loan limit: Loan $630,000 vs. 4-unit limit $1,551,250
- Credit score: 700 vs. minimum 680
- Down payment: 20% vs. minimum 20%
- Debt-to-income: 4.2% vs. max 45%
- Cash to close + reserves: Have $40,000, need $193,331 (6 mo. PITI reserves)→ Save another $153,331, negotiate seller credits, or use gift funds where allowed.
- Loan limit: Loan $560,000 vs. 4-unit limit $1,551,250
- Rent coverage (DSCR): Rent ÷ PITI = 1.39 (need ≥ 1)
- Credit score: 700 vs. minimum 680
- Down payment: 25% vs. minimum 20%
- Debt-to-income: 4.2% vs. max 45%
- Cash to close + reserves: Have $40,000, need $226,827 (6 mo. PITI reserves)→ Save another $186,827, negotiate seller credits, or use gift funds where allowed.
- Loan limit: Loan $525,000 vs. 4-unit limit $1,551,250
- Rent coverage (DSCR): Rent ÷ PITI = 1.46 (need ≥ 1)
| Program | Min down % | Min credit | Max DTI % | Reserves (mo) | Upfront MI % | MI <10% down | MI 10–19% | Closing % | Rate adj. | Min DSCR | Limit (your units) |
|---|---|---|---|---|---|---|---|---|---|---|---|
| FHA (owner-occupied) | |||||||||||
| Conventional (owner-occupied) | |||||||||||
| Investor (non-owner-occupied) |
Sensitivity analysis
Monthly cash flow and IRR for each scenario when one thing goes wrong — and when everything does.
| Stress | 3% owner-occ. | 3.5% FHA | 5% owner-occ. | 10% owner-occ. | 20% investor | 25% investor |
|---|---|---|---|---|---|---|
| Base case | -$1,511/mo IRR 11.5% | -$1,257/mo IRR 12.6% | -$1,407/mo IRR 11.1% | -$991/mo IRR 11.5% | $454/mo IRR 15.4% | $705/mo IRR 14.4% |
| Rate +1% | -$1,976/mo IRR 7.0% | -$1,723/mo IRR 8.1% | -$1,862/mo IRR 7.2% | -$1,422/mo IRR 8.4% | $60/mo IRR 13.2% | $336/mo IRR 12.6% |
| Rate +2% | -$2,457/mo IRR 2.8% | -$2,206/mo IRR 3.8% | -$2,334/mo IRR 3.3% | -$1,868/mo IRR 5.3% | -$345/mo IRR 11.0% | -$45/mo IRR 10.8% |
| Vacancy 10% | -$1,768/mo IRR 9.0% | -$1,515/mo IRR 10.1% | -$1,665/mo IRR 8.9% | -$1,248/mo IRR 9.7% | $146/mo IRR 13.7% | $397/mo IRR 12.9% |
| Maintenance +5 pts | -$1,867/mo IRR 8.1% | -$1,613/mo IRR 9.2% | -$1,763/mo IRR 8.1% | -$1,347/mo IRR 9.0% | $98/mo IRR 13.4% | $348/mo IRR 12.7% |
| Rent growth −2 pts | -$1,511/mo IRR 8.0% | -$1,257/mo IRR 9.2% | -$1,407/mo IRR 8.0% | -$991/mo IRR 8.9% | $454/mo IRR 13.1% | $705/mo IRR 12.4% |
| All stresses | -$2,571/mo IRR -0.9% | -$2,318/mo IRR 0.2% | -$2,457/mo IRR -0.2% | -$2,017/mo IRR 2.0% | -$585/mo IRR 7.6% | -$309/mo IRR 7.8% |
Amortization schedule
How each payment splits between interest and principal, and how equity builds as the loan shrinks and the property appreciates.
| Year | Payments | Principal | Interest | Balance | Value | Equity | Equity % |
|---|---|---|---|---|---|---|---|
| 1 | $53,495 | $7,325 | $46,170 | $679,996 | $724,500 | $44,504 | 6.1% |
| 2 | $53,495 | $7,835 | $45,660 | $672,161 | $749,857 | $77,697 | 10.4% |
| 3 | $53,495 | $8,381 | $45,115 | $663,780 | $776,103 | $112,322 | 14.5% |
| 4 | $53,495 | $8,964 | $44,531 | $654,816 | $803,266 | $148,450 | 18.5% |
| 5 | $53,495 | $9,588 | $43,907 | $645,228 | $831,380 | $186,153 | 22.4% |
| 6 | $53,495 | $10,256 | $43,239 | $634,972 | $860,479 | $225,507 | 26.2% |
| 7 | $53,495 | $10,970 | $42,525 | $624,002 | $890,595 | $266,594 | 29.9% |
| 8 | $53,495 | $11,734 | $41,762 | $612,268 | $921,766 | $309,499 | 33.6% |
| 9 | $53,495 | $12,551 | $40,944 | $599,717 | $954,028 | $354,311 | 37.1% |
| 10 | $53,495 | $13,425 | $40,071 | $586,292 | $987,419 | $401,127 | 40.6% |
| 11 | $53,495 | $14,360 | $39,136 | $571,932 | $1,021,979 | $450,046 | 44.0% |
| 12 | $53,495 | $15,359 | $38,136 | $556,573 | $1,057,748 | $501,175 | 47.4% |
| 13 | $53,495 | $16,429 | $37,067 | $540,144 | $1,094,769 | $554,625 | 50.7% |
| 14 | $53,495 | $17,573 | $35,923 | $522,571 | $1,133,086 | $610,515 | 53.9% |
| 15 | $53,495 | $18,796 | $34,699 | $503,775 | $1,172,744 | $668,969 | 57.0% |
| 16 | $53,495 | $20,105 | $33,390 | $483,670 | $1,213,790 | $730,120 | 60.2% |
| 17 | $53,495 | $21,505 | $31,990 | $462,165 | $1,256,273 | $794,108 | 63.2% |
| 18 | $53,495 | $23,002 | $30,493 | $439,163 | $1,300,242 | $861,080 | 66.2% |
| 19 | $53,495 | $24,604 | $28,892 | $414,559 | $1,345,751 | $931,192 | 69.2% |
| 20 | $53,495 | $26,317 | $27,178 | $388,242 | $1,392,852 | $1,004,610 | 72.1% |
| 21 | $53,495 | $28,149 | $25,346 | $360,092 | $1,441,602 | $1,081,510 | 75.0% |
| 22 | $53,495 | $30,109 | $23,386 | $329,983 | $1,492,058 | $1,162,075 | 77.9% |
| 23 | $53,495 | $32,206 | $21,290 | $297,777 | $1,544,280 | $1,246,503 | 80.7% |
| 24 | $53,495 | $34,448 | $19,047 | $263,329 | $1,598,330 | $1,335,001 | 83.5% |
| 25 | $53,495 | $36,847 | $16,649 | $226,482 | $1,654,271 | $1,427,789 | 86.3% |
| 26 | $53,495 | $39,412 | $14,083 | $187,070 | $1,712,171 | $1,525,101 | 89.1% |
| 27 | $53,495 | $42,157 | $11,339 | $144,913 | $1,772,097 | $1,627,184 | 91.8% |
| 28 | $53,495 | $45,092 | $8,404 | $99,821 | $1,834,120 | $1,734,299 | 94.6% |
| 29 | $53,495 | $48,232 | $5,264 | $51,590 | $1,898,315 | $1,846,725 | 97.3% |
| 30 | $53,495 | $51,590 | $1,906 | $0 | $1,964,756 | $1,964,756 | 100.0% |
Year-by-year exit analysis
If you sold at the end of each year: sale price minus selling costs and loan payoff, plus cash flow collected along the way.
| Sell in year | Sale price | Selling costs | Loan payoff | Net proceeds | Equity | Cum. cash flow | Total profit | Multiple | Annualized |
|---|---|---|---|---|---|---|---|---|---|
| 1 | $724,500 | ($43,470) | ($520,392) | $160,638 | $204,108 | $8,456 | -$26,906 | 0.86x | -13.7% |
| 2 | $749,857 | ($44,991) | ($515,414) | $189,452 | $234,443 | $18,520 | $11,972 | 1.06x | 3.0% |
| 3 | $776,103 | ($46,566) | ($510,036) | $219,500 | $266,066 | $30,239 | $53,739 | 1.27x | 8.4% |
| 4 | $803,266 | ($48,196) | ($504,227) | $250,843 | $299,039 | $43,665 | $98,508 | 1.50x | 10.7% |
| 5 | $831,380 | ($49,883) | ($497,951) | $283,547 | $333,430 | $58,847 | $146,394 | 1.75x | 11.8% |
| 6 | $860,479 | ($51,629) | ($491,170) | $317,680 | $369,308 | $75,838 | $197,518 | 2.01x | 12.3% |
| 7 | $890,595 | ($53,436) | ($483,846) | $353,314 | $406,750 | $94,694 | $252,008 | 2.29x | 12.5% |
| 8 | $921,766 | ($55,306) | ($475,932) | $390,528 | $445,834 | $115,469 | $309,996 | 2.58x | 12.6% |
| 9 | $954,028 | ($57,242) | ($467,384) | $429,403 | $486,644 | $138,221 | $371,623 | 2.90x | 12.5% |
| 10 | $987,419 | ($59,245) | ($458,149) | $470,025 | $529,271 | $163,010 | $437,035 | 3.23x | 12.4% |
Change the projection length with “Hold period” on the Inputs page (10 years now).
Refinance analyzer
Compare keeping each scenario's original loan with refinancing later. New loan = remaining balance + refinance costs. Mortgage insurance drops if the new loan is 80% of value or less.
| Metric | 3% owner-occ. | 3.5% FHA | 5% owner-occ. | 10% owner-occ. | 20% investor | 25% investor |
|---|---|---|---|---|---|---|
| Current rate | 7.000% | 6.750% | 7.000% | 7.000% | 7.750% | 7.750% |
| Balance at refinance | $656,776 | $663,780 | $643,234 | $609,380 | $544,039 | $510,036 |
| Est. value then | $776,103 | $776,103 | $776,103 | $776,103 | $776,103 | $776,103 |
| Loan-to-value | 84.6% | 85.5% | 82.9% | 78.5% | 70.1% | 65.7% |
| Refinance costs | $16,419 | $16,595 | $16,081 | $15,234 | $13,601 | $12,751 |
| Current P&I + MI /mo | $5,027 | $4,773 | $4,923 | $4,506 | $4,012 | $3,761 |
| New P&I + MI /mo | $4,545 | $4,394 | $4,452 | $4,060 | $3,343 | $3,134 |
| Monthly savings | $481 | $379 | $471 | $447 | $669 | $627 |
| Break-even | 35 mo | 44 mo | 35 mo | 35 mo | 21 mo | 21 mo |
| Remaining payments: keep | $1,628,636 | $1,546,444 | $1,595,056 | $1,460,075 | $1,299,858 | $1,218,617 |
| Total payments: refinance | $1,636,343 | $1,581,917 | $1,602,604 | $1,461,556 | $1,203,600 | $1,128,375 |
| Long-term savings | -$7,707 | -$35,473 | -$7,548 | -$1,481 | $96,259 | $90,242 |
Restarting a 30-year term can lower payments but raise total interest — compare the long-term line, not just the monthly one.
Tax-impact estimate (optional)
A rough year-1 estimate. Rental units can deduct expenses, interest and depreciation; your own unit's mortgage interest and property tax only help if you itemize above the standard deduction.
| Year 1 | 3% owner-occ. | 3.5% FHA | 5% owner-occ. | 10% owner-occ. | 20% investor | 25% investor |
|---|---|---|---|---|---|---|
| Rental share of building | 75% | 75% | 75% | 75% | 100% | 100% |
| Rental income | $74,100 | $74,100 | $74,100 | $74,100 | $85,500 | $85,500 |
| Rental expenses | ($23,933) | ($23,933) | ($23,933) | ($23,933) | ($31,910) | ($31,910) |
| Mortgage interest (rental share) | ($35,484) | ($34,628) | ($34,752) | ($32,923) | ($43,228) | ($40,526) |
| Depreciation (27.5 yr) | ($15,845) | ($15,941) | ($15,845) | ($15,845) | ($21,127) | ($21,127) |
| Taxable rental income | -$5,745 | -$3,236 | -$4,919 | -$1,436 | -$10,765 | -$8,063 |
| Tax on rental (− = savings) | -$1,264 | -$712 | -$1,082 | -$316 | -$2,368 | -$1,774 |
| Personal itemized deductions | $14,645 | $14,360 | $14,402 | $13,792 | $0 | $0 |
| Benefit from itemizing | $0 | $0 | $0 | $0 | $0 | $0 |
| Net tax effect | $1,264 | $712 | $1,082 | $316 | $2,368 | $1,774 |
| After-tax cash flow /mo | -$1,405 | -$1,198 | -$1,317 | -$964 | $651 | $852 |
- Not tax advice. Uses one flat marginal rate and ignores state tax, AMT, and the 3.8% NIIT.
- Rental losses are usually “passive”: up to $25,000 may offset wages if income is under $100k (phased out by $150k); otherwise losses carry forward.
- Depreciation is recaptured (up to 25%) when you sell; this estimate does not include sale-year taxes or capital gains.
- Owner-occupants may exclude gain on their own unit's share if they meet the 2-of-5-year rule.