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🚀 Should you liquidate investments to buy a home?

heyfinfam
inspired by r/personalfinance · remixed from SBLOC vs. Selling Investments for Down Payment: Which is better for home purchase? ★ 4.0
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You are eyeing a $990k apartment in NYC, but you have to pay cash. With $1.2M in a taxable brokerage and $130k in cash, you could liquidate your investments to make it happen. But wiping out your brokerage triggers a massive capital gains tax bill and kills your future compound growth. Alternatively, you could borrow against your portfolio using a Securities-Backed Line of Credit (SBLOC). But borrowing that much pushes your risk of a margin call dangerously high. This calculator compares the true cost of liquidating your portfolio versus borrowing against it to buy a home in cash.

🏦 Scenario 1: SBLOC Details

Instead of selling, you could use an SBLOC to borrow the cash you need. You avoid capital gains taxes, but you take on a variable interest rate. If your portfolio drops in value, the bank issues a maintenance call and forces you to sell assets. For a $990k apartment, borrowing $860k against a $1.2M portfolio likely exceeds the bank's limits entirely.

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✂️ Scenario 2: Selling Investments

If you sell your investments to pay cash, you owe long-term capital gains tax on your profits. This is a one-time hit, but it permanently reduces your wealth and future market returns. You own the apartment outright, but you start over with your taxable investments.

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See Also

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📊 Results

SBLOC Interest Cost

$0

Capital Gains Tax

$0

SBLOC vs. Liquidate Difference

$0

Decline to Trigger Margin Call

0%

Recommendation

SBLOC rejected

Calculator updated by heyfinfam (v26.7.0) · View history

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