Methodology

The calculators on Kavesta use standard financial formulas.

Mortgage Calculation
We use the standard amortization formula to calculate fixed monthly payments.

ROI Calculation
We calculate Net Operating Income (NOI) by subtracting vacancy and operating costs from gross rental income. Cash-on-cash return is calculated using pre-tax cash flow divided by total initial cash investment.

Affordability Calculation
We use a standard front-end ratio (30%) and back-end ratio (35%) to estimate maximum housing payments, subtracting ownership costs to find the mortgage capacity.