Real Estate · Free calculator

Down Payment Opportunity Cost Calculator

What would your down payment and closing costs grow to if invested instead? Compare that to the home equity you'd build over the same years.

Short answer

Down Payment Opportunity Cost Calculator

$82,098Up-front cash invested for 7 years grows to

This isolates the up-front cash only. Equity also benefits from the monthly principal you pay — use the net-worth calculator to compare full monthly cash flows.

How it's calculated: vs $160,522 home equity after 6% selling costs Adjust the inputs below to recalculate for your own numbers.

Disclaimer: Educational estimate. Excludes taxes, PMI and transaction-specific fees; future appreciation, rent growth and investment returns are uncertain. Not financial advice.

Country context

Tailor estimates to 🇺🇸 United States

All math runs in USD. We overlay United States-specific tax and cost assumptions + show local-currency equivalents at an approximate FX rate.

Transfer tax / stamp duty

1.00%

One-time on purchase

Annual property tax

1.10%

of assessed value

Rental income tax

22.0%

indicative effective

Typical mortgage rate

7.00%

Gross yield: 5–9%

Estimated United States taxes & fees on your inputs

One-time transfer tax / stamp duty$4,200

Annual recurring property tax$4,620

Capital gains on +20% appreciation (illustrative)$12,600

🇺🇸 United States note: Property tax varies massively by state (0.3% Hawaii → 2.2% NJ). 1031 exchange can defer capital gains on investment property. Tax rates are national midpoints — they vary by region, residency, and property type. FX shown at an approximate USD reference rate (updated periodically). This is an educational tool, not legal, tax, or investment advice.

New here? Watch it work in 2 seconds — then tweak it for you.

Home price$420,000

Down payment (%)10%

Buying closing costs (%)3%

Mortgage rate (%)6.5%

Home appreciation (%/yr)3.5%

Investment return (%/yr)6%

Years7

Try it like this

Tap a scenario to load realistic numbers, then tweak the sliders.

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Formula used

Compound growth of up-front cash

Closing costs are gone the day you buy, so they count fully toward the opportunity cost. The down payment becomes equity that grows with the home rather than the market.

invested = (down + closing) × (1 + return)^years; equity = value × (1 − 6%) − loan balance

Closing costs

2–5% of price

S&P 500 long-run real return

≈6–7%

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RevenueLab. (2026). Down Payment Opportunity Cost Calculator. Retrieved from https://www.revenuelab.fyi/down-payment-opportunity-cost-calculator

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Markdown

Source: [Down Payment Opportunity Cost Calculator — RevenueLab](https://www.revenuelab.fyi/down-payment-opportunity-cost-calculator) (2026).

Every assumption, in the open

Defaults are national-median starting points, not predictions. Change any of them — the result updates instantly and nothing else is hidden in the math.

• Home price $420,000 — near the 2025 US median existing-home sale price (NAR).
• Mortgage rate 6.5% on a 30-year fixed — in line with Freddie Mac PMMS averages in 2025–2026.
• Home appreciation 3.5%/yr and rent growth 3.5%/yr — close to long-run FHFA HPI and CPI shelter averages.
• Property tax 1.1% of value and maintenance 1% of value per year — common planning rules of thumb; check your county rate.
• Insurance $1,900/yr — roughly the national average homeowners premium; coastal states run far higher.
• Closing costs 3% to buy, 6% to sell (agent commission + transfer costs).
• Investment return 6%/yr on the money the renter doesn't spend on the house — a conservative diversified-portfolio figure.
• Excluded: mortgage interest deduction, capital-gains taxes, PMI. Most households take the standard deduction, and the $250k/$500k home-sale exclusion covers most sellers.

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FAQ

Is it better to invest the down payment instead of buying?

Only if your investment return beats home appreciation on a leveraged basis after costs — and you actually invest it. The net-worth calculator answers this fully.

How this calculator is built

Independently maintained

Written by Sam Doshi and the RevenueLab editorial team. We don't sell the data feeds this tool is built on.

Sourced from primary data

Benchmarks come from public AdSense / Stripe / IRS disclosures and reader-submitted data — never third-party "$X per view" claims. Full methodology.

Last editorial review

Reviewed on a rolling quarterly cycle. Dated reviews are published on the methodology record for each calculator.

Editorial standards

See our editorial policy and disclaimer. Results are estimates, not advice.

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