Replacement Fund Calculator
Work out the monthly saving needed to cover a future roof, boiler or lift replacement, accounting for cost inflation and savings return.
💼 Are you a real estate agent or broker? Send this calculator to your buyers on your own branded listing page — every enquiry comes straight to your WhatsApp. Create free agent page →Major building components have predictable lives. A roof, a boiler, a lift or a rendered facade will all need replacing on a rough schedule, and the cost is known well before the money is needed — which makes it one of the few expenses that can be fully planned for.
Two rates matter. Construction costs inflate, so the future bill is larger than today's quote, and savings earn something meanwhile. Both are inputs here because they differ by country and by decade.
The calculation
The future cost is today's price compounded at construction inflation. Anything already saved is grown at the savings return and deducted. The monthly contribution is the shortfall divided by the future-value factor for a regular monthly saving, ((1 + i)^n − 1) ÷ i.
Worked example
A roof costing 18,000 today, needed in twelve years, with 4% cost inflation will cost about 28,819. Saving monthly at a 3% return needs about 167 a month, of which roughly 23,977 is your own contributions and 4,841 is growth.
Inflation is the part that surprises
At 4% a year, twelve years turns an 18,000 job into nearly 29,000. Saving today's quoted price and stopping leaves a third of the bill unfunded, which is exactly how buildings end up with special levies.
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Create your free property pageFrequently asked questions
What inflation rate should I use for building costs?
Construction inflation has frequently run above general inflation, so a rate one to two points higher than consumer inflation is a reasonable planning assumption. Underestimating it is the common error.
Where should a replacement fund be held?
Somewhere with capital security and access matched to the timescale. Long horizons can take a little risk; anything within three years should be in cash or short-dated instruments so the money is definitely there.
Do buildings with several owners have to do this?
Many jurisdictions require a reserve or sinking fund for shared buildings, and even where it is optional it is far better than a levy. A building without one bills every owner a lump sum when the roof fails.