Sell Shares to Buy a House vs Keep Calculator NZ

This calculator helps you decide whether to sell shares to put a bigger deposit on a house, or to keep the shares and borrow more on the mortgage instead, a choice many investors face when buying a home in New Zealand. The trade-off is really about two rates pulling against each other. If you keep the shares, you expect them to grow, but you carry a larger mortgage and pay more interest. If you sell them, you borrow less and save that interest, but you give up the growth the shares might have delivered. Which wins depends on whether your expected share return is higher or lower than your mortgage rate. You enter the value of the shares in question, the annual return you expect from them, your mortgage interest rate, and the number of years over which to compare. The calculator works out the growth you would expect by keeping the shares, the extra mortgage interest you would pay by borrowing that amount rather than using the shares, and the net difference, pointing to the option that leaves you better off. Bear in mind it ignores tax, the real volatility of share markets, and that mortgage interest is paid from after-tax income, so treat it as a guide for thinking it through rather than a precise answer. Estimates only, not financial advice.

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Shares in question

Expected share return

Mortgage rate

Years to compare

Keeping the shares is about $31,715 ahead

expected share growth minus the extra mortgage interest

Expected share growth$96,715

Extra mortgage interest$65,000

Net difference$31,715

Ignores tax, share market volatility, and that interest is paid with after-tax money. Share returns are not guaranteed. Estimate only, not financial advice.

How it works

The expected share growth is the share value compounded at your expected return over the years, minus the starting value. The extra mortgage interest is the same share value times the mortgage rate times the years, treated as interest-only on the amount you would otherwise have borrowed. The net difference is the growth minus the interest: positive means keeping the shares is ahead, negative means selling and borrowing less is ahead.

Worked example

On 100,000 dollars of shares expected to return 7 percent for 10 years, growth is about 96,715 dollars. Borrowing that 100,000 at a 6.5 percent mortgage rate for 10 years costs about 65,000 dollars of extra interest. Keeping the shares comes out about 31,715 dollars ahead.

Related calculators

Index Fund Projection: share growth.
House Deposit Savings Calculator: building a deposit.
Mortgage Repayment: repayments.
Mortgage Offset Calculator: using savings against a loan.

Frequently asked questions

Should I sell shares to boost my deposit?

It comes down to whether your shares are likely to grow faster than the mortgage interest you would save by borrowing less. If your expected share return is above the mortgage rate, keeping them can win; if it is below, selling and borrowing less usually wins.

What does this calculator compare?

It compares the growth you would expect by keeping the shares against the extra mortgage interest you would pay by borrowing that amount instead of using the shares for your deposit, over the years you choose.

What does it leave out?

It ignores tax, including possible foreign investment fund rules on overseas shares, the volatility and uncertainty of share returns, and that mortgage interest is paid with after-tax money. Treat the result as a guide, not a guarantee.