⚡ Should you buy a home with cash or a mortgage?
This view is unlisted — only visible via link.
You're 25, making $60k a year, and sitting on $687k in assets. You want to buy a $325k home to give your son stability. Paying cash means no monthly mortgage, but you'll take a $45k tax hit and lose future investment growth. Getting a mortgage keeps your money in the market, but adds a big monthly payment to your budget.
Let's run the numbers to see which option leaves you wealthier by the time your son turns 18. We assume that if you pay cash, you'll invest the money you would have spent on a mortgage.
Please remember: We're only solving for the financial side of things. Your final decision should take into account personal factors beyond finances.
The Situation
We'll look at a 15-year timeline—the years until your son turns 18. Adjust the home price and your total investments below.
Liquidation Costs
Paying cash means selling off trust assets. You'll owe capital gains tax on the growth, which permanently reduces your investment balance.
Mortgage Option
This view assumes a fixed-rate mortgage, and calculates the opportunity cost of buying.
Down payment
Monthly mortgage payment
Market Factors
The biggest factor is opportunity cost—what your money could earn if left in the market. We use a conservative after-tax return rate.
After Tax Return Rate
🔗 See Also
The Verdict
We only recommend home ownership if it represents a strong investment strategy relative to renting and investing.
Net worth (Cash option)
Net worth (Mortgage option)
Wealth difference
Better option
Mortgage
Calculator updated by heyfinfam (v26.7.6) · View history
Privacy: None of your data is transmitted to the author of this view or any other third parties. Financial inputs are never used to identify you; they're only used to calculate results.
Disclaimer: This content and any calculations provided are for informational purposes only. The views, calculations, and methodologies expressed are those of the author and do not necessarily reflect those of this platform. Not financial advice. Users are solely responsible for any decisions made based on this information.